Financial Performance - For the six months ended June 30, 2023, the Group recorded a net profit of approximately HKD 35.8 million, a decrease of about HKD 17.9 million or 33.3% compared to approximately HKD 53.7 million for the same period in 2022[22] - The Group's revenue decreased by approximately HKD 197.1 million or 30.0% to about HKD 460.7 million for the six months ended June 30, 2023, down from approximately HKD 657.8 million in the same period of 2022[22] - The Group's profit margin decreased from approximately 8.2% in the first half of 2022 to about 7.8% in the first half of 2023[22] - The Group recorded a net profit of approximately HK$35.8 million for the six months ended 30 June 2023, a decrease of approximately HK$17.9 million or 33.3% from HK$53.7 million for the same period in 2022[33] - Revenue decreased by approximately HK$197.1 million or 30.0%, from approximately HK$657.8 million for 6M2022 to approximately HK$460.7 million for 6M2023[33] - The Group's net profit margin decreased from approximately 8.2% for 6M2022 to approximately 7.8% for 6M2023[142] Sales Performance - OEM sales revenue fell by approximately HKD 199.0 million or 35.1% to about HKD 367.8 million in the first half of 2023, primarily due to ongoing inflationary pressures and a slowdown in global economic growth[22] - The decline in OEM sales is attributed to reduced demand from major customers due to weakened consumer sentiment[22] - Revenue from major customers, Customer A and Customer B, was HK$112,531 and HK$90,727 respectively for the first half of 2023, compared to HK$166,190 and HK$136,620 in 2022[47] - Revenue from OEM sales decreased from approximately HK$566.8 million for 6M2022 to approximately HK$367.8 million for 6M2023, representing a decrease of approximately 35.1% due to weakened consumption sentiment[64] - Website sales revenue increased by approximately HKD 1.9 million or 2.1% to about HKD 92.9 million for the six months ended June 30, 2023, compared to approximately HKD 91.0 million in the same period of 2022[22] - Web sales revenue increased by approximately HK$1.9 million or 2.1%, from approximately HK$91.0 million for 6M2022 to approximately HK$92.9 million for 6M2023[33] User Engagement - The number of active registered user accounts increased from approximately 57,100 as of December 31, 2022, to about 60,800 as of June 30, 2023[22] - The number of active registered user accounts increased from approximately 57,100 as of 31 December 2022 to approximately 60,800 as of 30 June 2023[33] Cost Management - The Group recorded a decrease in cost of sales by approximately 32.9% from approximately HK$457.4 million for 6M2022 to approximately HK$306.8 million for 6M2023[80] - The group's cost of sales decreased by approximately 32.9% from about HK$457.4 million in the first half of 2022 to about HK$306.8 million in the first half of 2023[83] - Selling and distribution expenses decreased by approximately 18.7% from about HK$58.0 million in the first half of 2022 to about HK$47.1 million in the first half of 2023[110] - Administrative expenses decreased by approximately 3.6% from about HK$90.6 million in the first half of 2022 to about HK$87.4 million in the first half of 2023[111] Investments and Future Plans - The Group plans to invest in the development of cyber security-related maintenance and consultancy services to enhance the security of its web sales platforms[36] - The Group plans to expand its high-end trading card product manufacturing business in the PRC, introducing specialized machinery for production lines[57] - The Group aims to optimize its web sales platform, Q P Market Network, and expand its presence in international markets, particularly North America[57] - The Group is exploring new business directions, including original brand manufacturing (OBM) for card game products, to capture market opportunities[57] - The Group plans to continue investing in business development projects to maintain competitive advantages and adapt to market changes[61] Corporate Governance - The company aims to achieve high standards of corporate governance to protect shareholder interests and enhance corporate value[178] - The company has adopted a code of conduct for directors' securities transactions that meets the standards set by the Model Code[180] - The company has complied with the required standards set out in the Model Code throughout the first half of 2023[163] Shareholder Information - As of June 30, 2023, Mr. Cheng Wan Wai and Mr. Yeung Keng Wu Kenneth each hold a long position of 310,353,954 shares, representing 58.34% of the company[189] - Ms. Liu Shuk Yu Sanny holds 64,706,046 shares, accounting for 12.16% of the company[189] - Mr. Chan Wang Tao Thomas has a long position of 19,950,000 shares, which is 3.75% of the company[191] - The company has not granted any rights to directors or their families to subscribe for equity or debt securities during the six months ended June 30, 2023[176] - No changes in substantial shareholders' interests were noted in the interim report[198] Financial Position - As at 30 June 2023, the Group reported net current assets of approximately HK$163.8 million, a decrease from approximately HK$253.8 million as at 31 December 2022[120] - As at 30 June 2023, the Group's cash and cash equivalents were approximately HK$184.9 million, down from approximately HK$294.7 million as at 31 December 2022, representing a decrease of approximately HK$109.8 million[120] - The total borrowings and lease liabilities amounted to approximately HK$101.7 million as at 30 June 2023, down from approximately HK$119.2 million as at 31 December 2022[121] - The Group's gearing ratio was approximately 12.9% as of June 30, 2023, compared to 14.1% as of December 31, 2022, indicating stability during the reporting period[152] Compliance and Regulations - The company maintains compliance with the Securities and Futures Ordinance regarding shareholder disclosures[198] - The company has not disclosed any new strategies or market expansions in the interim report[196] - No significant short positions in shares were reported as of June 30, 2023[194]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) QPP Holdings Limited reported a 33.3% decrease in profit to HK$35.8 million and a 30.0% decrease in total revenue to HK$460.7 million in H1 2023, with basic EPS at 6.72 HK cents H1 2023 Financial Performance Overview | Metric | H1 2023 (HK$'000) | H1 2022 (HK$'000) | Change (%) | | :-------------------------------------- | :---------------- | :---------------- | :--------- | | Profit Attributable to Equity Holders | 35,800 | 53,668 | -33.3% | | Total Revenue | 460,700 | 657,770 | -30.0% | | Basic Earnings Per Share (HK cents) | 6.72 | 10.09 | -33.4% | - In H1 2023, revenue from Original Equipment Manufacturer (OEM) sales and website sales accounted for approximately **79.8%** and **20.2%** of total revenue, respectively[12](index=12&type=chunk) [Dividend Declaration](index=1&type=section&id=Dividend%20Declaration) The Board resolved to declare an interim dividend of **2.0 HK cents** per share for H1 2023, a decrease from **3.0 HK cents** per share in the same period of 2022 Interim Dividend Declaration | Period | Dividend Per Share (HK cents) | | :----- | :---------------------------- | | H1 2023 | 2.0 | | H1 2022 | 3.0 | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2023, the Group reported revenue of **HK$460,691 thousand**, gross profit of **HK$153,884 thousand**, and profit for the period of **HK$35,770 thousand**, with both revenue and profit decreasing year-on-year Key Data from Statement of Profit or Loss (For the six months ended June 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------------------- | :------------- | :------------- | | Revenue | 460,691 | 657,770 | | Cost of Sales | (306,807) | (457,385) | | Gross Profit | 153,884 | 200,385 | | Operating Profit | 37,136 | 62,820 | | Profit Before Income Tax | 39,840 | 62,483 | | Income Tax Expense | (4,070) | (8,815) | | Profit for the Period | 35,770 | 53,668 | [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets decreased to **HK$1,119,121 thousand** from **HK$1,179,235 thousand** on December 31, 2022, with total equity at **HK$790,906 thousand** and total liabilities at **HK$328,215 thousand** Key Data from Statement of Financial Position (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :-------------------------- | :------------- | :-------------------------- | | Total Assets | 1,119,121 | 1,179,235 | | Non-current Assets | 636,193 | 599,016 | | Current Assets | 482,928 | 580,219 | | Total Equity | 790,906 | 842,841 | | Total Liabilities | 328,215 | 336,394 | | Non-current Liabilities | 9,131 | 9,993 | | Current Liabilities | 319,084 | 326,401 | [Notes to the Interim Condensed Consolidated Financial Information](index=5&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [General Information and Basis of Preparation](index=5&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The Company, incorporated in the Cayman Islands, primarily engages in paper product manufacturing and trading, with interim condensed consolidated financial information prepared in HKD under HKAS 34 and Listing Rules, applying consistent accounting policies with no significant impact from new standards - The Company is incorporated in the Cayman Islands, and its subsidiaries are primarily engaged in the manufacturing and trading of paper products[7](index=7&type=chunk)[19](index=19&type=chunk) - The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the HKICPA and the applicable disclosure requirements of Appendix 16 to the Listing Rules of The Stock Exchange of Hong Kong Limited[8](index=8&type=chunk) - The adoption of new and revised standards has no significant impact on the Group's results and financial position, requiring no retrospective adjustments[10](index=10&type=chunk) [Significant Accounting Policies and Estimates](index=5&type=section&id=Significant%20Accounting%20Policies%20and%20Estimates) The Group's accounting policies are consistent with the prior year, adopting new standards effective January 1, 2023, with no significant financial impact, while management's judgments, estimates, and assumptions in preparing financial information may lead to different actual results - The accounting policies adopted are consistent with those applied in the annual financial statements for the year ended December 31, 2022[9](index=9&type=chunk) - Management is required to make judgments, estimates, and assumptions in preparing the interim condensed consolidated financial information, which affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[23](index=23&type=chunk) New and Revised Standards Issued But Not Yet Effective | Standard | Content | Effective Date | | :--------------------------------------------------------------------- | :-------------------------------------------------------------------- | :------------- | | HKAS 1 (Amendments) | Classification of Liabilities as Current or Non-current | January 1, 2024 | | HKAS 1 (Amendments) | Non-current Liabilities with Covenants | January 1, 2024 | | HKFRS 16 (Amendments) | Lease Liability in a Sale and Leaseback | January 1, 2024 | | HK(IFRIC)-Int 5 (Revised) | Presentation of Financial Statements — Classification by a Borrower of a Term Loan with a Repayment on Demand Clause | January 1, 2024 | | HKFRS 7 (Amendments) and HKAS 7 (Amendments) | Supplier Finance Arrangements (Amendments) | January 1, 2024 | | HKFRS 10 and HKAS 28 (Amendments) | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily from paper and other product sales is segmented into website and OEM sales, with total revenue of **HK$460,691 thousand** in H1 2023, a decrease from the prior year, where OEM sales, though largest, declined, while website sales remained stable - Management has identified two reportable segments based on sales channels: (i) website sales; and (ii) OEM sales[27](index=27&type=chunk) Revenue by Business Segment (For the six months ended June 30) | Segment | 2023 (HK$'000) | 2022 (HK$'000) | | :----------- | :------------- | :------------- | | Website Sales | 92,904 | 91,016 | | OEM Sales | 367,787 | 566,754 | | Total | 460,691 | 657,770 | Revenue from Major Customers (For the six months ended June 30) | Customer | 2023 (HK$'000) | 2022 (HK$'000) | | :------- | :------------- | :------------- | | Customer A | 112,531 | 166,190 | | Customer B | 90,727 | 136,620 | [Geographical Information](index=10&type=section&id=Geographical%20Information) The Group's revenue primarily originates from the US and European markets, collectively accounting for **84.0%** in H1 2023, with both regions experiencing decreased revenue mainly due to reduced demand from key OEM customers Revenue from External Customers by Location (For the six months ended June 30) | Location | 2023 (HK$'000) | 2022 (HK$'000) | | :------- | :------------- | :------------- | | US | 317,562 | 452,514 | | Europe | 69,450 | 119,228 | | China | 30,425 | 36,750 | | Others | 43,254 | 49,278 | | Total | 460,691 | 657,770 | Location of Non-current Assets (As of June 30) | Location | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------- | :------------- | :-------------------------- | | China | 535,382 | 536,893 | | Vietnam | 89,293 | 50,364 | | Total | 624,675 | 587,257 | [Other Net Income and Other Income](index=10&type=section&id=Other%20Net%20Income%20and%20Other%20Income) In H1 2023, other net income significantly increased to **HK$12,731 thousand**, driven by exchange gains and fair value gains on derivative financial instruments, while other income decreased to **HK$5,060 thousand** due to reduced scrap sales and government grants Other Net Income (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :------------------------------------------ | :------------- | :------------- | | Exchange Gain | 11,175 | 11,501 | | Fair Value Gain/(Loss) on Derivative Financial Instruments | 1,343 | (10,740) | | Gain on Disposal of Property, Plant and Equipment | 213 | 6 | | Total | 12,731 | 767 | Other Income (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------- | :------------- | :------------- | | Rental Income | 25 | 25 | | Scrap Sales | 2,908 | 5,949 | | Government Grants | 2,018 | 4,127 | | Others | 109 | 210 | | Total | 5,060 | 10,311 | [Expenses by Nature](index=11&type=section&id=Expenses%20by%20Nature) In H1 2023, total cost of sales, selling and distribution expenses, and administrative expenses decreased to **HK$441,346 thousand** year-on-year, with key expense items including raw materials, employee benefits, and subcontracting fees Total Expenses by Nature (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :---------------------------------------------------------------- | :------------- | :------------- | | Raw Materials and Consumables Used | 137,503 | 227,547 | | Employee Benefit Expenses (including directors' emoluments) | 161,655 | 178,455 | | Subcontracting Fees | 43,306 | 65,461 | | Depreciation of Property, Plant and Equipment | 25,541 | 27,149 | | Transportation Costs | 19,393 | 31,040 | | Total Cost of Sales, Selling and Distribution Expenses, and Administrative Expenses | 441,346 | 606,028 | [Net Finance Income/(Costs)](index=12&type=section&id=Net%20Finance%20Income%2F%28Costs%29) In H1 2023, the Group recorded net finance income of **HK$2,704 thousand**, compared to net finance costs of **HK$337 thousand** in the prior year, primarily driven by increased bank interest income Net Finance Income/(Costs) (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :---------------------------- | :------------- | :------------- | | Bank Interest Income | 4,947 | 270 | | Interest Expense on Bank Borrowings | (2,217) | (565) | | Interest Expense on Lease Liabilities | (26) | (42) | | Net Finance Income/(Costs) | 2,704 | (337) | [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) Income tax expense decreased to **HK$4,070 thousand** in H1 2023, reflecting varied tax rates and preferential policies for the Group's subsidiaries in China, Hong Kong, and Vietnam, including corporate income tax, small-profit enterprise rates, high-tech enterprise rates, and tax holidays/reductions Income Tax Expense (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :------------------ | :------------- | :------------- | | Current Income Tax | 7,975 | 8,915 | | Deferred Income Tax | (3,905) | (100) | | Total | 4,070 | 8,815 | - Subsidiaries established and operating in China are subject to China Corporate Income Tax at a rate of **25%**, with certain entities qualifying as small-profit enterprises enjoying a preferential tax rate of **5.0%**[34](index=34&type=chunk)[35](index=35&type=chunk) - Dongguan QPP Printing Co., Ltd and Tengda Printing (Heshan) Co., Ltd are certified as High and New Technology Enterprises, enjoying a preferential tax rate of **15%**[62](index=62&type=chunk) - The Vietnamese subsidiary, Q P Enterprise (Vietnam) Company Limited, benefits from tax holidays and tax rate reductions[63](index=63&type=chunk) [Earnings Per Share Attributable to Equity Holders of the Company](index=14&type=section&id=Earnings%20Per%20Share) Basic earnings per share for H1 2023 decreased to **6.72 HK cents** from **10.09 HK cents** in the prior year, primarily due to a reduction in profit attributable to equity holders of the Company Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2023 (HK$'000/Shares '000/HK cents) | 2022 (HK$'000/Shares '000/HK cents) | | :-------------------------------------- | :---------------------------------- | :---------------------------------- | | Profit Attributable to Equity Holders | 35,770 | 53,668 | | Weighted Average Number of Ordinary Shares | 532,000 | 532,000 | | Earnings Per Share (HK cents per share) | 6.72 | 10.09 | - The Group had no potentially dilutive ordinary shares in issue for the six months ended June 30, 2023 and 2022[38](index=38&type=chunk) [Dividends](index=15&type=section&id=Dividends) The Board declared an interim dividend of **2.0 HK cents** per ordinary share for H1 2023, totaling **HK$10,640 thousand**, in addition to the final dividend of **11.0 HK cents** per ordinary share, totaling **HK$58,520 thousand**, approved and paid for the previous financial year Dividend Declaration and Payment (For the six months ended June 30) | Dividend Type | Dividend Per Share (HK cents) | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------------- | :---------------------------- | :------------- | :------------- | | Interim Dividend | 2.0 | 10,640 | 15,960 | | Final Dividend for Previous Financial Year | 11.0 | 58,520 | 58,520 | - The interim dividend declared after the end of the reporting period was not recognized as a liability at the end of the reporting period[66](index=66&type=chunk) [Property, Plant and Equipment](index=15&type=section&id=Property%2C%20Plant%20and%20Equipment) In H1 2023, the Group's total cost of additions to property, plant, and equipment significantly increased to approximately **HK$58,104 thousand**, while the net book value of disposals was approximately **HK$380 thousand** Changes in Property, Plant and Equipment (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------------- | :------------- | :------------- | | Total Cost of Additions | 58,104 | 23,787 | | Net Book Value of Disposals | 380 | 88 | [Trade and Other Receivables](index=16&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2023, trade receivables increased to **HK$156,123 thousand** from December 31, 2022, with credit terms typically 30 to 90 days, no impairment provision made, and primarily denominated in USD and HKD Trade Receivables (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :---------------------- | :------------- | :-------------------------- | | Total Trade Receivables | 156,123 | 144,432 | Aging Analysis of Trade Receivables (As of June 30) | Aging | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :----------- | :------------- | :-------------------------- | | Within 30 days | 73,852 | 63,648 | | 31 to 60 days | 60,414 | 54,291 | | 61 to 90 days | 21,825 | 23,150 | | Over 90 days | 32 | 3,343 | Trade Receivables by Currency (As of June 30) | Currency | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------- | :------------- | :-------------------------- | | USD | 89,918 | 89,535 | | HKD | 63,031 | 51,128 | | RMB | 2,966 | 3,712 | | Others | 208 | 57 | [Borrowings](index=17&type=section&id=Borrowings) As of June 30, 2023, total bank borrowings decreased to **HK$99,781 thousand** from December 31, 2022, primarily denominated in HKD, bearing floating interest rates, and secured by right-of-use assets and property, plant, and equipment Bank Borrowings (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------------------ | :------------- | :-------------------------- | | Total Bank Borrowings | 99,781 | 116,319 | Borrowings Repayment Period (As of June 30) | Repayment Period | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :--------------- | :------------- | :-------------------------- | | Within one year | 68,721 | 73,043 | | One to two years | 13,252 | 19,506 | | Two to five years | 11,204 | 16,793 | | Over five years | 6,604 | 6,977 | Assets Pledged for Borrowings (As of June 30) | Asset | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------------------------ | :------------- | :-------------------------- | | Right-of-use Assets | 81,130 | 82,025 | | Property, Plant and Equipment | 71,345 | 73,162 | | Total | 152,475 | 155,187 | [Trade Payables](index=19&type=section&id=Trade%20Payables) As of June 30, 2023, trade payables increased to **HK$82,257 thousand** from December 31, 2022, with the majority denominated in RMB Trade Payables (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :---------------------- | :------------- | :-------------------------- | | Total Trade Payables | 82,257 | 68,159 | Aging Analysis of Trade Payables (As of June 30) | Aging | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :----------- | :------------- | :-------------------------- | | Within 30 days | 63,571 | 49,112 | | 31 to 60 days | 9,051 | 12,476 | | 61 to 90 days | 3,730 | 3,671 | | Over 90 days | 5,905 | 2,900 | Trade Payables by Currency (As of June 30) | Currency | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------- | :------------- | :-------------------------- | | RMB | 63,468 | 54,167 | | HKD | 10,990 | 11,785 | | USD | 7,102 | 1,754 | | Others | 697 | 453 | [Share Capital](index=21&type=section&id=Share%20Capital) As of June 30, 2023, the Company's authorized share capital remained at **2,000,000,000 shares**, with issued and fully paid share capital at **532,000,000 shares**, amounting to **HK$5,320 thousand**, unchanged from December 31, 2022 Share Capital Structure (As of June 30) | Share Capital Type | 2023 Number of Shares | December 31, 2022 Number of Shares | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------------------------ | :-------------------- | :--------------------------------- | :------------- | :-------------------------- | | Authorized Share Capital | 2,000,000,000 | 2,000,000,000 | 20,000 | 20,000 | | Issued and Fully Paid Share Capital | 532,000,000 | 532,000,000 | 5,320 | 5,320 | [Management Discussion and Analysis](index=22&type=section&id=Management%20Discussion%20and%20Analysis) [Company Profile](index=22&type=section&id=Company%20Profile) Established in 1985, QPP Group is a paper product manufacturing and printing service provider headquartered in Hong Kong with production facilities in China and Vietnam, offering products like board games, greeting cards, educational items, and packaging boxes to OEM clients and individual/corporate customers via online channels - The Group was established in **1985** as a paper product manufacturing and printing service provider, offering diverse customized product and printing solutions to customers[80](index=80&type=chunk) - Our headquarters are located in Hong Kong, with production facilities in Dongguan City and Heshan City, Guangdong Province, China, and Phu Ly City, Ha Nam Province, Vietnam[80](index=80&type=chunk) - Our main product categories include board games, greeting cards, early childhood education products, and packaging color boxes, sold to (i) OEM customers who place large orders for direct sales and distribution through their channels; and (ii) individual and corporate customers ordering through online sales channels[80](index=80&type=chunk) [Business Review](index=22&type=section&id=Business%20Review) In H1 2023, amidst global economic slowdown, inflation, and geopolitical conflicts impacting consumer sentiment, the Group actively promoted OEM and website sales through exhibitions and digital marketing, with the Vietnam plant completed in July 2023 and expected to commence production in Q3, and the Heshan plant expansion due for completion in December 2023 to enhance capacity and operational efficiency - Global economic growth continues to slow, with high inflation leading some consumers to reduce daily spending, impacting the retail market[129](index=129&type=chunk) - During the reporting period, the Group actively promoted its OEM and website sales businesses, including participating in various domestic and international trade exhibitions, strengthening digital marketing to reach potential customers, and investing resources in developing new product lines with market potential[129](index=129&type=chunk) - Construction of the Vietnam plant was completed in **July 2023**, with interior decoration and equipment installation underway, expected to commence formal production in **Q3 2023**; the new factory building at the Heshan plant, aimed at enhancing the Group's production capacity and overall operational efficiency, is expected to be completed in **December 2023**[129](index=129&type=chunk) [Financial Review](index=25&type=section&id=Financial%20Review) In H1 2023, the Group's revenue decreased by **30.0%** to **HK$460.7 million**, primarily due to reduced OEM sales, while gross profit decreased by **23.2%** to **HK$153.9 million**, but gross margin improved from **30.5%** to **33.4%**, and profit for the period decreased by **33.3%** to **HK$35.8 million** Financial Performance Overview (For the six months ended June 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | Change (%) | | :---------- | :------------- | :------------- | :--------- | | Revenue | 460,691 | 657,770 | -30.0% | | Gross Profit | 153,884 | 200,385 | -23.2% | | Gross Margin | 33.4% | 30.5% | +2.9pp | | Profit for the Period | 35,770 | 53,668 | -33.3% | | Net Margin | 7.8% | 8.2% | -0.4pp | [Revenue Breakdown](index=25&type=section&id=Revenue%20Breakdown) OEM sales revenue decreased by **35.1%** to **HK$367.8 million**, primarily impacted by inflation and global economic slowdown, while website sales revenue saw a stable **2.1%** increase to **HK$92.9 million** Revenue by Business Segment (For the six months ended June 30) | Segment | 2023 (HK$'000) | Share (%) | 2022 (HK$'000) | Share (%) | | :----------- | :------------- | :-------- | :------------- | :-------- | | OEM Sales | 367,787 | 79.8 | 566,754 | 86.2 | | Website Sales | 92,904 | 20.2 | 91,016 | 13.8 | | Total | 460,691 | 100.0 | 657,770 | 100.0 | - OEM sales revenue decreased by **35.1%**, primarily due to persistent inflationary pressures and a slowdown in global economic growth, which dampened consumer sentiment and reduced demand from key OEM customers for the Group's products[136](index=136&type=chunk) - Website sales revenue increased by approximately **2.1%** from approximately **HK$91.0 million** in the first six months of 2022 to approximately **HK$92.9 million** in the first six months of 2023[109](index=109&type=chunk) [Cost of Sales](index=26&type=section&id=Cost%20of%20Sales) Cost of sales decreased by **32.9%** to **HK$306.8 million**, primarily due to reduced production volume resulting from lower demand for OEM products Cost of Sales (For the six months ended June 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | Change (%) | | :---------- | :------------- | :------------- | :--------- | | Cost of Sales | 306,807 | 457,385 | -32.9% | - The decrease in cost of sales was primarily due to reduced production volume resulting from lower demand for our OEM products during the reporting period[111](index=111&type=chunk) [Gross Profit and Gross Margin](index=27&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by **23.2%** to **HK$153.9 million**, but gross margin increased by **2.9 percentage points** to **33.4%**, primarily driven by a higher proportion of website sales revenue and RMB depreciation against HKD, partially offset by reduced economies of scale from lower sales volume Gross Profit and Gross Margin (For the six months ended June 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | Change (%) | | :---------- | :------------- | :------------- | :--------- | | Gross Profit | 153,884 | 200,385 | -23.2% | | Gross Margin | 33.4% | 30.5% | +2.9pp | - The increase in gross margin was mainly attributable to a higher proportion of revenue from website sales and the depreciation of RMB against HKD, although this positive impact was partially offset by reduced economies of scale due to lower sales volume during the reporting period[139](index=139&type=chunk) [Other Net Income and Other Income Analysis](index=27&type=section&id=Other%20Net%20Income%20and%20Other%20Income%20Analysis) The increase in other net income was primarily due to RMB depreciation against HKD and fair value gains on derivative financial instruments, while the decrease in other income was mainly due to reduced scrap sales and government grants - The increase in other net income was mainly due to the depreciation of RMB against HKD, and the Group did not enter into forward foreign currency contracts to hedge against the risk of RMB appreciation against USD during the reporting period[139](index=139&type=chunk) - The decrease in other income was mainly due to reduced scrap sales and lower government grants received from China (including Hong Kong)[140](index=140&type=chunk) [Operating Expenses](index=27&type=section&id=Operating%20Expenses) Selling and distribution expenses decreased by **18.7%** to **HK$47.1 million**, primarily due to lower freight costs, while administrative expenses remained stable, decreasing by **3.6%** to **HK$87.4 million** Operating Expenses (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | Change (%) | | :------------------------ | :------------- | :------------- | :--------- | | Selling and Distribution Expenses | 47,147 | 58,018 | -18.7% | | Administrative Expenses | 87,392 | 90,625 | -3.6% | - The decrease in selling and distribution expenses was mainly due to lower freight costs and the implementation of related improvement strategies during the reporting period[140](index=140&type=chunk) [Net Finance Income and Income Tax Expense](index=28&type=section&id=Net%20Finance%20Income%20and%20Income%20Tax%20Expense) The Group recorded net finance income of **HK$2.7 million** in H1 2023, compared to net finance costs in the prior year, driven by higher surplus cash levels and rising interest rates, while income tax expense decreased by **53.8%** to **HK$4.1 million** due to lower recognized profit - The Group recognized net finance income of approximately **HK$2.7 million** in the first six months of 2023, compared to net finance costs of approximately **HK$0.3 million** in the first six months of 2022, attributable to higher surplus cash levels placed in time deposits and debt instruments, and continuously rising interest rates since 2022[170](index=170&type=chunk) - The decrease in income tax expense was primarily due to lower recognized profit during the reporting period[117](index=117&type=chunk) [Liquidity and Financial Resources](index=28&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2023, the Group's net current assets were approximately **HK$163.8 million** and cash and cash equivalents were approximately **HK$184.9 million**, both lower than December 31, 2022, while maintaining a healthy liquidity position and prudent cash and financial management policies Liquidity Position (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :---------------------- | :------------- | :-------------------------- | | Net Current Assets | 163,800 | 253,800 | | Cash and Cash Equivalents | 184,900 | 294,700 | - The Group maintained a healthy liquidity position in the first six months of 2023, with working capital primarily funded by internal resources, and adopted prudent cash and financial management policies[172](index=172&type=chunk) - As of June 30, 2023, the Group's total borrowings and lease liabilities amounted to approximately **HK$101.7 million** (December 31, 2022: approximately **HK$119.2 million**)[173](index=173&type=chunk) [Contingent Liabilities](index=29&type=section&id=Contingent%20Liabilities) As of June 30, 2023, the Group had no significant contingent liabilities - As of June 30, 2023, the Group had no significant contingent liabilities (December 31, 2022: Nil)[120](index=120&type=chunk) [Foreign Exchange Rate Risk and Related Hedging](index=29&type=section&id=Foreign%20Exchange%20Rate%20Risk%20and%20Related%20Hedging) The Group faces foreign currency risk primarily from revenue, production costs, and operating expenses denominated in non-HKD currencies, managing this risk by closely monitoring exchange rate fluctuations and using financial instruments for hedging when necessary, without adopting a formal hedging accounting policy - The Group is exposed to foreign currency risk primarily because its revenue, production costs, and operating expenses are denominated in currencies other than HKD[121](index=121&type=chunk) - The Group has established policies to manage foreign currency risk by closely monitoring exchange rate movements and utilizing financial instruments for hedging when necessary, without adopting a formal hedging accounting policy[175](index=175&type=chunk) - In the first six months of 2023, fair value gain on derivative financial instruments was approximately **HK$1.3 million** (first six months of 2022: fair value loss of approximately **HK$10.7 million**)[147](index=147&type=chunk) [Capital Commitments](index=29&type=section&id=Capital%20Commitments) As of June 30, 2023, the Group's capital commitments for the acquisition of property, plant, and equipment amounted to approximately **HK$46.2 million**, a slight increase from December 31, 2022 Capital Commitments (As of June 30) | Item | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------------------------------ | :------------- | :-------------------------- | | Acquisition of Property, Plant and Equipment | 46,200 | 45,000 | [Significant Acquisitions or Disposals of Subsidiaries, Associates, and Joint Ventures](index=30&type=section&id=Significant%20Acquisitions%20or%20Disposals) In H1 2023, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - In the first six months of 2023, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[148](index=148&type=chunk) [Future Plans for Material Investments and Capital Assets](index=30&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) Beyond what is disclosed in this announcement, the Group currently has no other plans for material investments or capital assets and held no significant investments in H1 2023 - Save as disclosed in this announcement, as of the date of this announcement, the Group has no other plans regarding material investments or capital assets[149](index=149&type=chunk) - The Group did not hold any material investments in the first six months of 2023[150](index=150&type=chunk) [Employees and Remuneration Policy](index=30&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the Group had **2,434 employees** with total staff costs of approximately **HK$161.7 million**, and its remuneration policy is regularly reviewed based on market conditions and individual performance, including basic salary, directors' emoluments, pension scheme contributions, and discretionary bonuses Employee and Remuneration Data (As of June 30) | Metric | 2023 | December 31, 2022 | | :---------- | :---- | :---------------- | | Total Employees | 2,434 | 2,280 | Total Staff Costs (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------- | :------------- | :------------- | | Total Staff Costs | 161,700 | 178,500 | - The Company's remuneration policy is regularly reviewed primarily with reference to market conditions and the performance of the Company and individual employees (including directors), with remuneration packages including (where applicable) basic salary, directors' emoluments, contributions to pension schemes, and discretionary bonuses linked to the Group's financial performance and individual performance[178](index=178&type=chunk) [Future Outlook](index=23&type=section&id=Future%20Outlook) Facing manufacturing market challenges, the Group will steadfastly execute strategic deployments, including expanding into high-end collectible card product manufacturing, extending the QPMN e-commerce platform internationally, optimizing production base positioning with Dongguan as an R&D center and Heshan/Vietnam focusing on OEM services to mitigate geopolitical risks and enhance competitiveness, and exploring Own Brand Manufacturing (OBM) card products and cybersecurity services for business diversification - The Group will intensify efforts to develop the production business for high-end collectible card products, having introduced specialized production equipment, and the sales team is actively increasing exposure in the domestic Chinese market[104](index=104&type=chunk) - The Group will continue to focus on developing its e-commerce platform, Q P Market Network (QPMN), and is committed to expanding QPMN into international markets, including allocating human resources for business promotion in North America and participating in major exhibitions worldwide[105](index=105&type=chunk) - In the long term, the Dongguan plant will strengthen its role and capabilities as a product engineering, research and development, and digital production center, while the Heshan and Vietnam plants will focus on providing end-to-end OEM services to enhance the geographical advantages of the supply chain[106](index=106&type=chunk) - The Group intends to explore Own Brand Manufacturing (OBM) business for related products and plans to invest resources in developing cybersecurity-related maintenance and consulting services to increase its business diversity[132](index=132&type=chunk) [Other Information](index=31&type=section&id=Other%20Information) [Corporate Governance Practices](index=31&type=section&id=Corporate%20Governance%20Practices) The Company has adopted the principles and code provisions of the Corporate Governance Code in Appendix 14 of the Listing Rules; despite the Chairman and CEO being the same person, deviating from Code Provision C.2.1, the Board believes this arrangement provides strong and consistent leadership with sufficient safeguards for power balance - The Company has adopted the principles and code provisions of the Corporate Governance Code (the 'CG Code') set out in Appendix 14 to the Listing Rules as its own corporate governance code[153](index=153&type=chunk) - Mr. Cheng Wan Wai currently holds both the positions of Chairman of the Board and Chief Executive Officer of the Company, which deviates from Code Provision C.2.1 of the CG Code; the Board believes this arrangement provides strong and consistent leadership for the Group and facilitates effective execution of business strategies[180](index=180&type=chunk) [Standard Code for Securities Transactions](index=32&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the Standard Code in Appendix 10 of the Listing Rules, and all directors confirmed compliance throughout H1 2023 - The Company has adopted a code of conduct regarding securities transactions by directors on terms no less exacting than the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules[155](index=155&type=chunk) - All Directors confirmed that they have complied with the required standards set out in the adopted Standard Code throughout the six months ended June 30, 2023[181](index=181&type=chunk) [Share Option Scheme](index=32&type=section&id=Share%20Option%20Scheme) The Company adopted a Share Option Scheme on December 20, 2019, to incentivize eligible individuals, but no share options have been granted to any directors, eligible employees, or other third parties under the scheme from its adoption date up to June 30, 2023 - On December 20, 2019, the Company adopted a Share Option Scheme to provide incentives or rewards to selected eligible persons for their contributions to the Group[181](index=181&type=chunk) - No share options have been granted under the Share Option Scheme to any directors, eligible employees, or other third parties from the date of its adoption up to June 30, 2023[157](index=157&type=chunk) [Use of Proceeds](index=32&type=section&id=Use%20of%20Proceeds) The Company listed on January 16, 2020, with net proceeds of approximately **HK$111.9 million**; as of June 30, 2023, approximately **HK$108.05 million** has been utilized, with **HK$3.8 million** remaining, primarily for enhancing production capacity and operational flexibility - The Company's shares were listed on the Main Board of the Stock Exchange on **January 16, 2020**, with actual net proceeds of approximately **HK$111.9 million**[157](index=157&type=chunk) Use of Net Proceeds from Listing (As of June 30, 2023) | Purpose | Actual Net Proceeds (HK$'000) | Actual Use of Net Proceeds (HK$'000) | Unutilized Net Proceeds (HK$'000) | Expected Timeline | | :------------------------------------------------ | :---------------------------- | :----------------------------------- | :-------------------------------- | :---------------- | | Enhance the Group's production capacity and operational flexibility | 58,726 | (54,918) | 3,808 | Before December 31, 2023 | | Optimize the Group's product portfolio and production expertise | 27,964 | (27,964) | — | N/A | | Enhance the Group's technological capabilities and upgrade IT infrastructure | 13,087 | (13,087) | — | N/A | | Working capital and other general corporate purposes | 12,081 | (12,081) | — | N/A | | Total | 111,858 | (108,050) | 3,808 | | - As of June 30, 2023, the Company had unutilized net proceeds from the listing of approximately **HK$3.8 million**[184](index=184&type=chunk) [Changes in Directors' Information](index=34&type=section&id=Changes%20in%20Directors'%20Information) Several directors received new appointments or honors during the reporting period, including Independent Non-executive Directors Mr. Chan Hiu Fung, Mr. Ng Sung, Professor Cheng Man Chung, and Chairman and Executive Director Mr. Cheng Wan Wai, with no other disclosable changes to directors' biographical details beyond those disclosed - Independent Non-executive Director Mr. Chan Hiu Fung was appointed as a member of the Social Development Expert Group under the Chief Executive's Policy Unit Expert Group and Chairman of the 'Innovation and Technology Venture Fund' Advisory Committee[160](index=160&type=chunk)[187](index=187&type=chunk) - Independent Non-executive Director Mr. Ng Sung was appointed as Chairman of the Executive Committee of the Hong Kong Owners Association[161](index=161&type=chunk) - Independent Non-executive Director Professor Cheng Man Chung was appointed as a member of the Carbon Neutrality and Sustainable Development Committee[186](index=186&type=chunk) - Mr. Cheng Wan Wai, Chairman and Executive Director of the Company, was awarded the Medal of Honour by the Government of the Hong Kong Special Administrative Region[195](index=195&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=34&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) In H1 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - In the first six months of 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[196](index=196&type=chunk) [Interim Dividend](index=34&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of **2.0 HK cents** per ordinary share for H1 2023, payable on or about **October 11, 2023**, to shareholders registered on **September 22, 2023** - The Board resolved to declare an interim dividend of **2.0 HK cents** per ordinary share for the first six months of 2023, totaling approximately **HK$10.6 million**[163](index=163&type=chunk) - The interim dividend will be paid on or about **Wednesday, October 11, 2023**, to shareholders whose names appear on the register of members of the Company at the close of business on **Friday, September 22, 2023**[163](index=163&type=chunk) [Closure of Register of Members](index=35&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for the interim dividend, the Company will suspend its register of members from **September 20, 2023**, to **September 22, 2023**, inclusive - To determine the entitlement to the interim dividend, the Company's register of members will be closed from **Wednesday, September 20, 2023**, to **Friday, September 22, 2023**, both days inclusive[164](index=164&type=chunk) [Events After the Reporting Period](index=35&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events affecting the Group occurred after the end of H1 2023 and up to the date of this announcement - No significant events affecting the Group occurred after the first six months of 2023 and up to the date of this announcement[191](index=191&type=chunk) [Review by Independent Auditor of Unaudited Interim Condensed Consolidated Financial Information](index=35&type=section&id=Review%20by%20Independent%20Auditor) The Company's Audit Committee, with management, reviewed the Group's accounting principles and practices, and discussed audit and financial reporting matters, while independent auditor PricewaterhouseCoopers reviewed the unaudited interim condensed consolidated financial information in accordance with HKSRS 2410 - The Company's Audit Committee, together with management, has reviewed the accounting principles and practices adopted by the Group and discussed audit and financial reporting matters, including the review of the Group's unaudited interim condensed consolidated financial statements for the first six months of 2023[198](index=198&type=chunk) - The Company's independent auditor, PricewaterhouseCoopers, has reviewed the unaudited interim condensed consolidated financial information in accordance with Hong Kong Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the HKICPA[166](index=166&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=36&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The H1 2023 interim results announcement will be published on the Stock Exchange and Company websites, and the interim report will be dispatched to shareholders and published on the aforementioned websites in due course - The interim results announcement for the first six months of 2023 will be published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (www.qpp.com) in accordance with the Listing Rules[167](index=167&type=chunk) - The interim report for the first six months of 2023, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[167](index=167&type=chunk)

Economic Environment - In FY2022, the global economy faced challenges such as rising inflation and geopolitical tensions, impacting consumption sentiments in Europe and the USA[14]. - The overall economic atmosphere and market demand have posed considerable challenges, with inflation and interest rate hikes affecting consumer purchasing power[42]. - The Group remains cautious about future prospects due to geopolitical and economic uncertainties, while focusing on short-term and long-term development strategies[28]. Financial Performance - Overall revenue decreased by approximately 8.2% to approximately HK$1,276.4 million in FY2022[24]. - OEM sales decreased by approximately 9.1% to approximately HK$1,082.7 million, primarily due to weakened consumer sentiment in a rising interest rate environment[24]. - Revenue for the year ended December 31, 2022, was HK$1,276,392, a decrease of approximately 8.1% from HK$1,389,759 in 2021[36]. - Gross profit for 2022 was HK$416,764, down from HK$430,108 in 2021, reflecting a decline of approximately 3.1%[36]. - Profit for the year increased to HK$126,839, up from HK$119,042 in 2021, representing an increase of approximately 6.5%[36]. - The Group recorded a net profit of approximately HK$126.8 million for FY2022, representing an increase of approximately 6.5% from approximately HK$119.0 million for FY2021[55]. - The net profit margin increased from approximately 8.6% for FY2021 to approximately 9.9% for FY2022, attributed to improved gross profit margin due to RMB depreciation against HKD[55]. Sales and Revenue Breakdown - Revenue from web sales decreased by approximately 2.5% to approximately HK$193.7 million, with web sales proportion of total revenue rising from approximately 14.3% in FY2021 to approximately 15.2% in FY2022[24]. - The proportion of web sales in total revenue increased, indicating a strategic shift towards enhancing online sales capabilities[24]. - Web sales decreased from approximately HK$198.7 million for FY2021 to approximately HK$193.7 million for FY2022, representing a decrease of approximately 2.5% as outdoor activities gradually resumed[68]. Operational Developments - The construction of a production plant in Vietnam commenced, expected to complete in Q2 2023, aimed at diversifying supply chains and reducing operational risks[18]. - The new Vietnam plant is expected to commence operations in the second half of 2023, playing a significant strategic role in the overall supply chain[28]. - The Group plans to enhance operational efficiency and reduce costs by integrating technology into operations, aiming for Industry 4.0 maturity[31]. - The Group launched the Q P Market Network (QPMN), a B2B2C online platform, to enhance web sales business[23]. Cost Management - The Group's cost of sales decreased by approximately 10.4% from approximately HK$959.7 million for FY2021 to approximately HK$859.6 million for FY2022, attributed to a decrease in production output[76]. - Selling and distribution expenses decreased by approximately 17.4% from approximately HK$133.6 million for FY2021 to approximately HK$110.4 million for FY2022, mainly due to savings in transportation expenses[83]. - Administrative expenses slightly decreased by approximately 1.2% from approximately HK$187.5 million in FY2021 to approximately HK$185.2 million in FY2022, indicating stable cost management[88]. Dividends and Shareholder Returns - A final dividend of HK11.0 cents per share, amounting to approximately HK$58.5 million, is proposed for FY2022, subject to approval at the AGM[27]. Cash Flow and Financial Position - The net cash generated from operating activities for FY2022 was approximately HK$269.0 million, significantly up from approximately HK$116.2 million in FY2021[104]. - As of 31 December 2022, the Group reported net current assets of approximately HK$253.8 million, an increase from approximately HK$214.9 million as of 31 December 2021[100]. - Total borrowings and lease liabilities amounted to approximately HK$119.2 million as of 31 December 2022, compared to approximately HK$88.9 million as of 31 December 2021[103]. Management and Governance - The company has over 35 years of experience in the printing industry, with key executives having extensive backgrounds in strategic planning and business development[150][154][160]. - The management team is committed to maintaining legal compliance and effective corporate governance, with a dedicated risk management committee[160][161]. - The company has a strong governance structure with independent non-executive directors leading key committees such as audit, remuneration, and risk management[180]. Future Strategies - The Group plans to actively expand its business and explore OEM opportunities to capture market potential in the PRC for premium card products[56]. - The Group will continue to invest resources in relevant business units and development projects to enhance competitive advantages and steadily expand its business[64]. - The company will continue to assess business objectives and adjust plans according to changing market conditions[134].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公告的全部或任何部分內容而產生 或因依賴該等內容而引致的任何損失承擔任何責任。 Q P GROUP HOLDINGS LIMITED 雋 思 集 團 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1412） 截至二零二二年十二月三十一日止年度 全年業績公告 二零二二年業績摘要 ‧ 截至二零二二年十二月三十一日止年度（「二零二二年財政年度」），雋思 集團控股有限公司（「本公司」）及其附屬公司（統稱「本集團」）的溢利約為 126.8百萬港元，較截至二零二一年十二月三十一日止年度（「二零二一年 財政年度」）增加約6.5%。 ‧ 於二零二二年財政年度，本集團的總收益約為1,276.4百萬港元，較二零 二一年財政年度減少約8.2%。於二零二二年財政年度，來自原始設備製造 商（「OEM」）銷售及網站銷售的收益分別佔總收益的84.8%及15.2%。 ‧ 於二零二二年財政年度，本公司的每股基本盈利約為23.84港仙（二零二一 年財政年度：22.38港仙）。 ...

Company Overview - Q P Group Holdings Limited operates two key production plants in Dongguan and Heshan, Guangdong Province, with over 30 years of operating history[15]. - The principal product categories include tabletop games, greeting cards, educational items, and premium packaging, primarily sold to OEM customers and individual corporate customers[16]. - A self-owned production plant in Ha Nam Province, Vietnam is under development, with expected completion in the second quarter of 2023[17]. Financial Performance - The Group recorded a net profit of approximately HK$53.7 million for the six months ended June 30, 2022, representing an increase of approximately 65.1% from HK$32.5 million for the same period in 2021, with a net profit margin rising to approximately 8.2% from 5.5%[20]. - Revenue for the six months ended June 30, 2022, was approximately HK$657.8 million, an increase of approximately 11.6% from HK$589.6 million for the same period in 2021, primarily driven by a 14.2% increase in OEM sales[20]. - OEM sales revenue increased by approximately HK$70.3 million to approximately HK$566.8 million for the six months ended June 30, 2022, compared to HK$496.4 million for the same period in 2021[20]. - Revenue from web sales decreased slightly by approximately HK$2.1 million or 2.3% to approximately HK$91.0 million for the six months ended June 30, 2022, from HK$93.2 million for the same period in 2021[20]. - The Group achieved revenue of approximately HK$657.8 million for 6M2022, representing an increase of approximately 11.6% compared to HK$589.6 million for 6M2021[31]. - Gross profit for 6M2022 was approximately HK$200.4 million, representing an increase of approximately 12.2% compared to HK$178.6 million for 6M2021[43]. - Profit for the period increased by approximately HK$21.2 million or 65.1% from approximately HK$32.5 million for 6M2021 to approximately HK$53.7 million for 6M2022, with net profit margin increasing from approximately 5.5% to approximately 8.2%[53]. - Basic and diluted earnings per share rose to 10.09 HK cents, compared to 6.11 HK cents in 2021, marking a 64.5% increase[178]. Challenges and Market Conditions - The Group faced challenges due to COVID-19, including short-term closed-loop management at the Dongguan plant and work-from-home arrangements during the peak of the outbreak[17]. - The outlook for the global economy remains cautious due to inflationary pressures, a strong USD, and rising transportation costs, which may impact the demand for tabletop games[23]. Business Strategy and Development - The Group plans to continue focusing on consolidating its business and exploring OEM opportunities in the USA and Europe through exhibitions and trade shows[24]. - Development of the Q P Market Network (QPMN), a business-to-business-to-consumer online platform, will be a key strategy for the Group moving forward[24]. - The Group aims to expand its product range within QPMN to meet market demand for diversified customized products[24]. - The Group will also introduce new products on other web sales platforms and utilize crowdfunding to enhance brand presence in the global online market[28]. Expenses and Income - The Group's cost of sales increased by approximately 11.3% from approximately HK$411.0 million for 6M2021 to approximately HK$457.4 million for 6M2022[43]. - Selling and distribution expenses decreased by approximately HK$4.2 million or 6.8%, from approximately HK$62.2 million for 6M2021 to approximately HK$58.0 million for 6M2022[47]. - Administrative expenses increased by approximately HK$4.0 million or 4.7% from approximately HK$86.6 million for 6M2021 to approximately HK$90.6 million for 6M2022[48]. - The Group's other income decreased mainly due to a reduction in sales of scrap materials, partially offset by an increase in government subsidies in the PRC[46]. Shareholder Information - The board declared an interim dividend of HK3.0 cents per ordinary share, amounting to a total dividend of approximately HK$16.0 million for 6M2022[53]. - Mr. Cheng Wan Wai currently holds both the chairman and chief executive officer positions, which the Board believes provides strong leadership and facilitates efficient execution of business strategies[74]. - The Company listed 133,000,000 ordinary shares at an offer price of HK$1.18 per share, resulting in net proceeds of approximately HK$111.9 million after deducting listing expenses[79]. Assets and Liabilities - As at 30 June 2022, net current assets were approximately HK$196.7 million, down from approximately HK$214.9 million as at 31 December 2021[56]. - Cash and cash equivalents as at 30 June 2022 were approximately HK$134.1 million, representing a decrease of approximately HK$24.7 million from approximately HK$158.8 million as at 31 December 2021[56]. - As of June 30, 2022, total borrowings and lease liabilities amounted to approximately HK$100.2 million, an increase from approximately HK$88.9 million as of December 31, 2021[58]. - The Group's gearing ratio was approximately 12.3% as of June 30, 2022, compared to 10.5% as of December 31, 2021, indicating an increase due to higher borrowing levels for future development[58]. Compliance and Governance - The Company has complied with the Corporate Governance Code during 6M2022, with a noted deviation regarding the separation of the roles of chairman and chief executive officer[70]. - All Directors confirmed compliance with the required standards for securities transactions as set out in the Model Code throughout 6M2022[77]. Cash Flow and Investments - For the six months ended June 30, 2022, the company generated cash from operations amounting to HK$57,797,000, compared to HK$31,978,000 for the same period in 2021, representing an increase of 80.8%[196]. - The net cash generated from operating activities for the period was HK$50,348,000, up from HK$27,130,000 in 2021, indicating an increase of 85.5%[196]. - The net cash used in investing activities was HK$25,395,000, compared to HK$30,973,000 in the previous year, showing a decrease of 18.0%[196]. Future Plans - The expected timeline for utilising the remaining net proceeds is by 31 December 2023[119]. - The Company plans to enhance production capacity and operational flexibility by reallocating production capacity to Heshan and constructing an additional factory building, with an allocation of approximately HK$18.9 million for this purpose[119][128].

Pandemic Impact and Market Conditions - The Group reported a stable pandemic situation in FY2021, allowing PRC manufacturers to capture growth in demand for various commodities[15]. - The Group's performance was impacted by the prolonged COVID-19 pandemic, which hindered global economic recovery[15]. - The introduction of effective public health policies in the PRC contributed to a favorable environment for business operations[15]. - The emergence of the Omicron variant in late 2021 caused another wave of health crises, affecting global business operations[15]. - The ongoing COVID-19 pandemic has influenced lifestyle changes, increasing demand for indoor products and e-commerce[18]. - The ongoing COVID-19 pandemic continued to impact the global economy, affecting supply chains and shipping costs[46]. - The Group's operational resilience allowed it to partially offset the negative impacts of uncontrollable external factors[46]. Financial Performance - In FY2021, the company achieved overall revenue growth of approximately 12.7% to approximately HK$1,389.8 million, driven by increases in both OEM sales and web sales[24]. - OEM sales increased from approximately HK$1,074.6 million in FY2020 to approximately HK$1,191.0 million in FY2021, representing an increase of approximately 10.8%[24]. - Revenue from web sales reached a record high of approximately HK$198.7 million in FY2021, an increase of approximately 25.8% from approximately HK$158.0 million in FY2020[24]. - The proportion of web sales in total revenue rose from approximately 12.8% in FY2020 to approximately 14.3% in FY2021, reflecting the company's strategic focus on web sales development[24]. - Net profit for FY2021 decreased by approximately 8.0% to approximately HK$119.0 million, with a net profit margin dropping to approximately 8.6%[27]. - Gross profit decreased by approximately HK$6.8 million or 1.5% to approximately HK$430.1 million, with a gross profit margin of approximately 30.9%[27]. - Overall revenue for FY2021 increased by approximately 12.7% to approximately HK$1,389.8 million, driven by growth in OEM and web sales[26]. - The Group recorded a net profit of approximately HK$119.0 million for FY2021, a decrease of approximately 8.0% from HK$129.3 million in FY2020, with a net profit margin dropping from 10.5% to 8.6%[53][56]. Strategic Initiatives and Future Outlook - The Group's strategic focus remains on leveraging e-commerce growth amidst ongoing market challenges[15]. - The annual report includes insights into the Group's future outlook and strategies in response to market dynamics[14]. - The company plans to establish its first self-owned production plant outside of China in Vietnam, with construction expected to commence in Q2 2022 and complete in Q3 2023[23]. - The land sublease in Vietnam marks a milestone in the company's long-term strategy to consolidate production capacity and enhance risk management capabilities[23]. - The Group aims to expand its customer base in the tabletop game market in Europe, which is expected to have considerable growth potential[59]. - The Group will continue to implement various development strategies to grow its web sales business, particularly through the Q P Market Network[59]. - The Group is focusing on consolidating operational excellence and pursuing steady and diversified business expansion to navigate uncertainties from the pandemic and geopolitical crises[54][57]. Operational Enhancements - The Group implemented various enhancement initiatives in production standardization, automation, and logistics management to optimize operations[46]. - The Group's efforts in production technique breakthroughs and quality improvements helped gain long-term trust from OEM customers[50]. - The Group's market presence and awareness were enhanced through sustained business development efforts[50]. - The Group has invested additional resources to expand its marketing and IT teams to support web infrastructure development and product promotion[25]. Shareholder Returns and Dividends - Proposed final dividend of HK11.0 cents per share, totaling approximately HK$58.5 million, subject to approval at the upcoming AGM[28]. - The total dividend for FY2021, if approved, will amount to HK13.0 cents per share[31]. Leadership and Corporate Structure - Mr. Cheng Wan Wai and Mr. Yeung Keng Wu Kenneth are the founders and executive directors, each with over 35 years of experience in the printing industry[188][191]. - The executive team includes directors from various subsidiaries, enhancing operational oversight across multiple business units[193]. - The company has maintained a consistent leadership structure since its inception, which may contribute to its stability and strategic direction[191]. - The leadership team is well-educated, with advanced degrees in business administration, enhancing their strategic capabilities[193]. Investments and Acquisitions - The Group acquired the entire issued share capital of Universe Oriental Enterprise Limited for an adjusted consideration of approximately HK$10,156,000 on 30 June 2021[107]. - The Group completed acquisitions of several companies for an aggregate consideration of approximately HK$41,837,000 on 20 July 2021[107]. - The Group has set up a policy to manage foreign currency risk by monitoring foreign currency rates and employing financial instruments for hedging[98].

Company Overview - The company operates two key production plants located in Dongguan and Heshan, Guangdong Province, China, specializing in paper product manufacturing and printing services[11]. - Major product categories include tabletop games, greeting cards, educational items, and premium packaging, with a strong focus on customized product engineering services[11]. - The company has over 30 years of operating history and has established stable business relationships with major customers in the United States and Europe[11]. - Major OEM customers include an international greeting cards publisher and several multinational children's educational products and toy brands[11]. - The company offers value-adding services and printing solutions for a wide spectrum of products, catering to both OEM customers and individual corporate clients[11]. - The company has a significant presence in the market, with products sold through direct sales and distribution networks as well as online sales channels[11]. - The interim report indicates a strong operational capability to meet mass quantity orders from OEM customers[11]. - The company is committed to expanding its market presence and enhancing its product offerings through continuous innovation and development[11]. Financial Performance - The Group recorded a net profit of HK$32.5 million for the six months ended 30 June 2021, a decrease of approximately 17.2% from HK$39.2 million for the same period in 2020[13]. - Revenue for the Group was approximately HK$589.6 million for 6M2021, representing an increase of approximately 16.6% from HK$505.6 million for 6M2020, primarily due to increased OEM sales[13]. - Revenue from OEM sales increased by approximately HK$58.8 million or 13.4% from approximately HK$437.6 million for 6M2020 to approximately HK$496.4 million for 6M2021[13]. - The Group achieved revenue of approximately HK$589.6 million for the first six months of 2021, representing an increase of approximately 16.6% compared to HK$505.6 million for the same period in 2020[29]. - OEM sales increased from approximately HK$437.6 million for 6M2020 to approximately HK$496.4 million for 6M2021, representing an increase of approximately 13.4%[32]. - Web sales increased from approximately HK$68.0 million for 6M2020 to approximately HK$93.2 million for 6M2021, representing an increase of approximately 37.1%[33]. - The U.S. market accounted for approximately 68.9% of total revenue in 6M2021, increasing from 67.6% in 6M2020, driven by higher demand for greeting cards and puzzles[38]. - The European market contributed approximately 17.4% to total revenue in 6M2021, up from 17.0% in 6M2020, due to economic recovery and new OEM customer orders[38]. Operational Developments - The Group plans to launch a new e-commerce website, MakeToteBags ("MTB"), targeting the global market for personalized bags, expected to be launched in Q3 2021[17]. - The Group is developing a new business-to-business-to-consumer platform, Q P Market Network ("QPMN"), aimed at enhancing market reach and sustainable growth in web sales[21]. - QPMN's first plugin program for customized puzzles is targeted for launch in Q3 2021, allowing online shops to offer personalized puzzles easily[21]. - The Group aims to expand its IT and digital marketing teams to support greater market penetration and diversification[17]. - The Group plans to enhance its digital capabilities by adding a state-of-the-art digital press, HP Indigo 100K, to its Dongguan production plant in the second half of 2021[27]. - The investment in the new digital press is expected to improve the Group's competitiveness and accommodate changing market needs[27]. - The Group has entered into a memorandum of understanding for a 48-year sublease of approximately 40,000 m² of land in Vietnam to establish its first self-owned production plant outside of China[23]. - Construction of the new production plant in Vietnam is expected to commence in Q1 2022, with operations anticipated to start in mid-2023[23]. Cost and Expenses - The Group's cost of sales increased by approximately 19.4% from approximately HK$344.2 million for 6M2020 to approximately HK$411.0 million for 6M2021[41]. - Selling and distribution expenses increased by approximately HK$16.6 million or 36.4%, amounting to approximately HK$62.2 million for 6M2021, mainly due to increased transportation expenses driven by the growth of web sales[49]. - Administrative expenses increased by approximately 20.2% from approximately HK$72.0 million for 6M2020 to approximately HK$86.6 million for 6M2021, attributed to the appreciation of RMB and increased manpower[49]. - The increase in cost of sales was also driven by the increase in raw materials cost and subcontracting charges due to higher sales of greeting cards[41]. - The increase in staff cost in cost of sales was due to the increase in the number of production staff[41]. - The Group engaged subcontractors for assembly work of greeting cards, which contributed to the increase in subcontracting charges[41]. Cash Flow and Liquidity - The net cash generated from operating activities for 6M2021 was approximately HK$27.1 million, a decrease from approximately HK$77.7 million for 6M2020[61]. - The net cash used in investing activities was approximately HK$31.0 million for 6M2021, compared to approximately HK$18.7 million for 6M2020[61]. - The net cash used in financing activities was approximately HK$77.7 million for 6M2021, contrasting with net cash generated from financing activities of approximately HK$31.3 million for 6M2020[61]. - The decrease in cash and cash equivalents as of 30 June 2021 was approximately HK$81.1 million compared to approximately HK$236.7 million as of 31 December 2020, primarily due to the payment of final dividend[58]. - As of June 30, 2021, the Group reported net current assets of approximately HK$186.9 million, a decrease from approximately HK$232.5 million as of 31 December 2020[58]. - Total borrowings and lease liabilities for the Group amounted to approximately HK$80.4 million as of 30 June 2021, down from approximately HK$92.9 million as of 31 December 2020[60]. - The Group is focused on monitoring its gearing ratio and managing liquidity to ensure sufficient cash flow to service its indebtedness[67]. Shareholder Information - Mr. Cheng Wan Wai and Mr. Yeung Keng Wu Kenneth each hold a long position of 310,353,954 shares, representing 58.34% of the total shareholding[104]. - Ms. Liu Shuk Yu Sanny holds 64,706,046 shares, accounting for 12.16% of the total shareholding[106]. - Mr. Chan Wang Tao Thomas has a long position of 19,950,000 shares, representing 3.75% of the total shareholding[106]. - Mr. Mak Chin Pang holds 3,990,000 shares, which is 0.75% of the total shareholding[106]. - As of June 30, 2021, Good Elite holds 310,353,954 shares, representing 58.34% of the total shareholding[130]. - Cypress Spurge holds 64,706,046 shares, representing 12.16% of the total shareholding[126]. - Mr. Cheng Wan Wai and Mr. Yeung Keng Wu Kenneth each beneficially own 50% of Good Elite[131]. - Ms. Liu Shuk Yu Sanny is the sole beneficial owner of Cypress Spurge, holding 100%[134]. Corporate Governance - The Company has complied with the Corporate Governance Code except for the deviation from code provision A.2.1, where the roles of chairman and chief executive officer are held by the same individual, Mr. Cheng Wan Wai[84]. - Mr. Cheng has been the key leadership figure since 1985, primarily involved in formulating business strategies and determining the overall direction of the Group[84]. - The Board believes that having Mr. Cheng in both roles provides strong and consistent leadership, facilitating efficient execution of business strategies[87]. - The Company adopted a Share Option Scheme on December 20, 2019, to provide incentives to selected eligible persons for their contributions to the Group[93]. - As of June 30, 2021, no options were granted under the Share Option Scheme to any Directors, eligible employees, or third parties[93]. - The Company’s shares were listed on the Main Board on January 16, 2020, with 133,000,000 ordinary shares allotted at an offer price of HK$1.18 per share[93]. - The actual net proceeds from the listing were approximately HK$111.9 million after deducting listing expenses[93]. - The Company intends to apply the net proceeds in a manner consistent with the description in the Prospectus, while continuing to evaluate business objectives[93]. - The Board will review the separation of the roles of chairman and chief executive officer at an appropriate time based on the Group's circumstances[87]. Risk Management - The Group's accounting policies remain consistent with those of the annual financial statements for the year ended 31 December 2020[181]. - The adoption of new and amended standards did not have significant impacts on the Group's results and financial position[181]. - There have been no changes in the risk management policies since 31 December 2020[197]. - There was no material change in the contractual undiscounted cash outflows for financial liabilities compared to the financial year end 31 December 2020[197]. - The Group is still assessing the impacts of adopting new standards and amendments in future reporting periods[189].

Financial Performance - Adjusted net profit for FY2020 increased by approximately 42.1% to approximately HK$130.5 million from approximately HK$91.9 million in FY2019[29]. - Adjusted net profit margin rose from approximately 7.7% in FY2019 to approximately 10.6% in FY2020[29]. - Revenue from web sales increased significantly by approximately 52.6% to approximately HK$158.0 million in FY2020, up from approximately HK$103.5 million in FY2019[29]. - Overall gross profit increased by approximately HK$71.3 million or 19.5% to approximately HK$436.9 million in FY2020[29]. - Gross profit margin improved to approximately 35.4% in FY2020 from approximately 30.6% in FY2019[29]. - Total revenue achieved a moderate increase of approximately 3.3% to approximately HK$1,232.6 million in FY2020[29]. - Proposed final dividend of HK12 cents per share, amounting to approximately HK$63.8 million for FY2020[29]. - Revenue for FY2020 increased by approximately 3.3% to HK$1,232.6 million from HK$1,193.6 million in FY2019[46]. - OEM sales revenue decreased by approximately HK$15.5 million or 1.4% to HK$1,074.6 million in FY2020 from HK$1,090.1 million in FY2019[46]. - The Group achieved a revenue of approximately HK$1,232.6 million for FY2020, representing an increase of approximately 3.3% compared to HK$1,193.6 million for FY2019[67]. Impact of COVID-19 - The Group reported a challenging year in 2020 due to the global impact of the COVID-19 pandemic, which led to nationwide lockdowns and disrupted business activities[17]. - The COVID-19 outbreak in January 2020 temporarily interrupted operations at the Dongguan and Heshan plants due to worker return issues after the Chinese New Year[21]. - Stringent disease control measures were implemented, allowing the plants to resume operations by February 2020, leading to improved operational efficiency and reduced production costs[21]. - The pandemic created opportunities for the Group to innovate and expand its product offerings in response to changing consumer needs[17]. - The demand for tabletop game products surged due to social distancing policies, prompting the company to optimize production capacities and enhance operational efficiency[26]. - The outbreak of COVID-19 adversely affected OEM sales, particularly for customers in the U.S. and Europe, but export orders were restored to normal levels in the second half of 2020[46]. E-commerce Growth - E-commerce thrived during the pandemic as outdoor activities were limited, leading to increased online shopping[17]. - The company established a web sales business over the last decade, enhancing its digital presence and infrastructure, which contributed to significant growth in the e-commerce market during the pandemic[22]. - The company expanded its product offerings and improved web sales platforms' compatibility and personalization functions, further strengthening its competitiveness in the online market[22]. - The company’s efforts in digital marketing strategies and web-to-print systems facilitated its growth in the booming global e-commerce market[22]. - Active registered user accounts increased by approximately 37.2% from approximately 34,900 as of December 31, 2019, to approximately 47,900 as of December 31, 2020[48]. Strategic Initiatives - The Group is committed to ongoing product development and technological advancements to enhance its competitive position in the market[12]. - Future outlook and guidance will be addressed, focusing on potential growth areas and market expansion strategies[12]. - The company aims to develop its web sales business as a long-term growth driver and increase its revenue proportion[32]. - Plans to establish new specialized e-commerce websites for popular product categories and explore a business-to-business-to-consumer model[32]. - The strategy to establish a new production site in Vietnam remains unchanged, with ongoing progress in acquiring land and assets[32]. Corporate Governance - The company has adopted the principles and code provisions of the Corporate Governance Code ("CG Code") as its own code of corporate governance[166]. - The company has complied with the CG Code from the Listing Date (16 January 2020) to 31 December 2020, with a noted deviation regarding the separation of roles between the chairman and chief executive officer[171]. - The board considers that the current arrangement of Mr. Cheng in both roles is beneficial for the group and shareholders[171]. - The company has implemented safeguards to ensure a balance of powers within the board, including consultation with experienced directors on major operational issues[171]. - The board will continue to review the separation of roles at an appropriate time based on the group's circumstances[171]. Management and Leadership - The company has a strong leadership team with over 35 years of experience in the printing industry, established in 1985[121]. - The executive directors are responsible for formulating overall strategies and planning for the group[124]. - The executive team has over 35 years of experience in the printing industry, enhancing strategic planning and operational efficiency[129]. - The company has established a risk management committee to oversee compliance and governance matters[129]. - The management team is committed to enhancing corporate governance and capital management practices[129]. Market Challenges - The Group anticipates challenges from rising labor and material costs in the PRC in the coming years[56]. - The Group will continue to monitor the impact of COVID-19 and U.S.-China trade tensions on its financial performance and take appropriate measures[65]. - The Group expects continued growth in its web sales business despite potential risks from the COVID-19 pandemic and trade tensions[64].

Financial Performance - The company reported a significant increase in revenue, achieving a total of $X million for the interim period, representing a Y% growth compared to the previous year[9]. - The Group achieved a net profit of approximately HK$39.2 million for the six months ended June 30, 2020, representing an increase of 86.8% from approximately HK$21.0 million for the same period in 2019[13]. - Revenue for the Group decreased by approximately 10.5% to approximately HK$505.6 million for 6M2020 from approximately HK$564.9 million for 6M2019, primarily due to a decline in OEM sales[23]. - The Group achieved a revenue of approximately HK$505.6 million for 6M2020, representing a decrease of approximately 10.5% compared to HK$564.9 million for 6M2019[37]. - The Group's profit increased by approximately HK$18.2 million or 86.8% from approximately HK$21.0 million for 6M2019 to approximately HK$39.2 million for 6M2020[67]. - The net profit margin increased from approximately 3.7% in 6M2019 to approximately 7.8% in 6M2020[67]. - The adjusted net profit attributable to equity holders increased by approximately 66.0% from approximately HK$24.3 million in 6M2019 to approximately HK$40.4 million in 6M2020[67]. - Operating profit increased to HK$50,051,000, up 66.6% from HK$30,050,000 in the previous year[155]. - The company reported a profit for the period of HK$39,249,000 for the six months ended June 30, 2020, compared to a profit of HK$21,012,000 for the same period in 2019, reflecting an increase of approximately 87%[163]. User Engagement and Market Expansion - User data showed an increase in active users, reaching Z million, which is an A% increase year-over-year[9]. - The number of active registered user accounts increased by approximately 18.6%, from approximately 34,900 as of December 31, 2019, to approximately 41,400 as of June 30, 2020[20]. - Market expansion efforts are underway, with plans to enter F new markets by the end of the fiscal year, potentially increasing market share by G%[9]. - The increase in web sales was attributed to a higher gross margin compared to OEM sales, as well as cost reductions from currency depreciation and cost control measures[25]. Product Development and Innovation - New product launches are anticipated to contribute an additional D million in revenue, with a focus on expanding the product line in the upcoming months[9]. - The company is investing in new technology development, allocating E million towards R&D initiatives aimed at enhancing product features and user experience[9]. Financial Health and Cash Flow - Cash flow from operations improved, with a total of K million generated during the interim period, indicating strong financial health[9]. - As of June 30, 2020, the Group reported net current assets of approximately HK$206.5 million, an increase of 80.3% compared to approximately HK$114.6 million as of December 31, 2019[75]. - The Group's cash and cash equivalents were approximately HK$194.2 million, representing an increase of approximately HK$89.4 million or 85.3% compared to approximately HK$104.8 million as of December 31, 2019[75]. - Net cash generated from operating activities was approximately HK$77.7 million, an increase of 87% compared to approximately HK$41.5 million in the same period of 2019[75]. - The company reported a net cash inflow from financing activities of HK$31,279,000 for the six months ended June 30, 2020, compared to a net cash outflow of HK$16,970,000 in the same period of 2019[172]. Cost Management and Efficiency - The company reported a net profit margin of J%, reflecting improved operational efficiency and cost management strategies[9]. - Cost of sales decreased by approximately 14.8% from HK$404.1 million in 6M2019 to HK$344.2 million in 6M2020, primarily due to lower raw material costs and reduced staff costs[50]. - Selling and distribution expenses decreased by approximately 3.5% from HK$47.3 million in 6M2019 to HK$45.6 million in 6M2020, attributed to lower transportation and staff costs[59]. - The Group has implemented cost control measures in response to the challenging business environment, including streamlining factory operations and reducing unnecessary expenses[30]. Strategic Initiatives - The company is considering strategic acquisitions to bolster its market position, with a budget of H million earmarked for potential targets[9]. - A new marketing strategy has been implemented, aiming to increase brand awareness and customer engagement, with an expected impact on sales growth of I%[9]. - The Group plans to expand manufacturing capacities outside of China, including setting up a production site in Vietnam to mitigate risks from the PRC-U.S. trade conflict[29]. Shareholder Information and Corporate Governance - The Board declared an interim dividend of HK2.0 cents per ordinary share, amounting to a total dividend of approximately HK$10.6 million for 6M2020[68]. - The Company has 532,000,000 ordinary shares in issue as of the date of the interim report[69]. - The Board has committed to high corporate governance standards, adopting the principles of the Corporate Governance Code since the Listing Date[91]. - The Group's remuneration policies align with relevant legislation and market conditions, ensuring competitive compensation for employees[83]. Risks and Challenges - The business growth and financial performance sustainability in the second half of 2020 remains uncertain due to the ongoing impact of COVID-19 and the PRC-U.S. trade conflict[31]. - The Group faced challenges in OEM sales due to the impact of COVID-19 on customers' operations in the U.S. and Europe, leading to postponed deliveries[16]. - The decrease in sales in the U.S. market was mainly due to reduced demand for greeting card products during the COVID-19 outbreak[49]. - The increase in sales in the European market was driven by higher demand for tabletop games during the lockdown period[49].

Financial Performance - The net profit excluding listing expenses for FY2019 increased by approximately 28.4% to approximately HK$91.9 million from approximately HK$71.5 million in FY2018[24]. - The adjusted net profit margin increased from approximately 6.2% to approximately 7.7% in FY2019[24]. - The gross profit increased by approximately HK$83.5 million or 29.6% to approximately HK$365.6 million in FY2019, with the gross profit margin rising to approximately 30.6% from approximately 24.3% in 2018[24]. - Revenue achieved a moderate increase of approximately 2.6% to approximately HK$1,193.6 million, driven by sales growth from both OEM and web sales products[24]. - Net profit for the year was HK$84,288,000, compared to HK$50,991,000 in 2018, reflecting an increase of approximately 65.5%[38]. - Basic earnings per share rose to 21.12 HK cents in 2019 from 12.78 HK cents in 2018, marking an increase of approximately 65.5%[38]. - Total revenue for FY2019 increased by approximately HK$30.6 million, or 2.6%, to approximately HK$1,193.6 million from approximately HK$1,163.0 million in FY2018[49]. - Revenue from the U.S. market accounted for approximately HK$898.9 million, representing about 75.3% of total revenue in FY2019[48]. - Revenue derived from OEM sales grew by approximately HK$16.1 million, or 1.5%, to approximately HK$1,090.1 million in FY2019[50]. - Revenue from web sales increased by approximately HK$14.5 million, or 16.3%, to approximately HK$103.5 million in FY2019[55]. Strategic Initiatives - The company observed steady growth in demand for paper products in the US and European markets, alongside stabilized prices for major materials[16]. - The e-commerce market's growth and advancements in artificial intelligence and industrial IoT reinforced the company's strategy to position itself as an innovative manufacturer[16]. - The company plans to expand its manufacturing capacities in Vietnam, targeting to establish its own production site by the end of 2021[29]. - The company aims to enhance its e-commerce platforms by developing websites in multiple languages and improving mobile functionalities to capture a larger customer base[29]. - The company will further promote its "Marketplace" platform, allowing customers to shop for designs from third-party designers[29]. - The strategic move to diversify operational risks included outsourcing some production processes to subcontractors in Vietnam[24]. - The Group plans to enhance its web sales business by employing additional staff and reinforcing resources in the coming years[61]. - Future strategies include developing production support in Southeast Asia and upgrading IT infrastructure to capture more business opportunities[63]. Operational Efficiency - The company relocated some production facilities from its Dongguan Factory to Heshan Factory to enhance productivity and production specialization[23]. - The Group is committed to digitalisation, connectivity, and automation to improve production efficiency and cost-effectiveness[62]. - The company aims to improve operational efficiency by 15% through automation and process optimization initiatives[132]. - The company has implemented quality assurance procedures and obtained patents to enhance production efficiency[45]. - The cost of sales decreased by approximately 6.0% from approximately HK$880.9 million in FY2018 to approximately HK$828.1 million in FY2019[81]. - The gross profit margin improved from approximately 24.3% in FY2018 to approximately 30.6% in FY2019, attributed to RMB depreciation and increased tax refund rates for export products[81]. Market Expansion - The company appointed its first sales representative in Europe to explore the European market and cultivate business relationships[24]. - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in market share by the end of the next fiscal year[132]. - Revenue growth from the US market was driven by increased sales of greeting cards and website products, while European sales decreased due to reduced orders from a major client[78]. Corporate Governance - The company has adopted the principles and code provisions of the CG Code as the basis of its corporate governance practices, complying with the CG Code during the year ended December 31, 2019, except for a deviation from code provision A.2.1[175]. - The Board monitors the operating and financial performance of the Group and ensures effective governance and sound internal control and risk management systems are in place[180]. - The company has established a corporate governance framework and policies based on the Corporate Governance Code to enhance transparency and accountability[171]. - The Board is committed to safeguarding the interests of shareholders and enhancing corporate value[171]. Leadership and Management - The company has a strong leadership team with diverse expertise in various operational areas, enhancing overall management capabilities[161][163]. - The independent non-executive director has extensive experience in professional accounting and has served in various committees[155]. - The leadership team includes members with advanced degrees and certifications in their respective fields, indicating a commitment to professional development[163]. - The company emphasizes the importance of quality assurance and compliance in its manufacturing processes[163]. Financial Position - As of December 31, 2019, the Group reported net current assets of approximately HK$114.6 million, compared to approximately HK$30.8 million as of December 31, 2018[103]. - Cash and cash equivalents increased by approximately HK$44.9 million to approximately HK$104.8 million as of December 31, 2019, from approximately HK$59.9 million as of December 31, 2018[103]. - Total borrowings and lease liabilities amounted to approximately HK$192.6 million as of December 31, 2019, down from approximately HK$234.0 million as of December 31, 2018[103]. - The gearing ratio decreased to approximately 16.4% from 37.1% in 2018, primarily due to a decrease in bank borrowings and an increase in cash and cash equivalents[113]. Challenges and Risks - FY2019 was marked by challenges due to the US-China trade war, impacting global markets and necessitating strategic planning by the company[16]. - The ongoing trade conflicts between the PRC and the U.S. have not materially affected the company's business operations or financial results[48]. - The Group remains cautious about the global economic outlook due to uncertainties from COVID-19 and ongoing political and trade tensions[60]. - The company is monitoring the potential impact of the COVID-19 outbreak on its operations and supply chain[57].