Financial Performance - The company's revenue for the year ended December 31, 2023, was HKD 155,390,000, representing a decrease of 20.1% compared to the previous year[9]. - The loss attributable to the company's owners was HKD 41,180,000, a decline of 22.5% year-on-year[9]. - The group recorded a revenue of approximately HKD 155,390,000 for the fiscal year 2023, a decrease of about HKD 39,150,000 or 20.1% compared to HKD 194,540,000 in fiscal year 2022[18]. - Revenue from the cigarette packaging business was approximately HKD 154,880,000, down HKD 12,700,000 or 7.6% from HKD 167,580,000 in the previous fiscal year[19]. - The environmental governance business generated revenue of approximately HKD 260,000, a significant decrease of HKD 26,380,000 or 99.0% from HKD 26,640,000 in fiscal year 2022[19]. - The overall gross profit for the group was approximately HKD 33,300,000, down from HKD 47,060,000 in the previous fiscal year, resulting in a gross margin of 21.4%, a decline of 2.8%[21]. - The net impairment loss on financial and contract assets was approximately HKD 17,860,000, a decrease of about HKD 10,550,000 from HKD 28,410,000 in fiscal year 2022[24]. - The net asset value of the group as of December 31, 2023, was HKD 315,200,000, down from HKD 361,260,000 in the previous fiscal year[34]. - The total cash and restricted cash balance was approximately HKD 46,130,000, a decrease from HKD 91,230,000 in the previous fiscal year[34]. - The net cash inflow from operating activities for the fiscal year 2023 was HKD 5,493,000, a significant decrease from HKD 54,891,000 in fiscal year 2022[36]. - The total capital expenditure for the year was approximately HKD 15,200,000, down from HKD 69,470,000 in the previous fiscal year[39]. - The company reported a net decrease in cash and cash equivalents of HKD 34,249,000, resulting in year-end cash and cash equivalents of HKD 12,341,000[36]. Market Conditions - The domestic tobacco industry experienced a decline in high-end tobacco sales, marking a reversal of five years of continuous high growth, with market prices continuing to fall[8]. - The company faced significant impacts from weak market demand in its tobacco packaging materials supply business, leading to a decrease in overall performance[10]. - The overall economic environment in China showed resilience, with a GDP growth rate of 5.2% by the end of the fourth quarter, despite challenges in consumer confidence and uneven recovery[8]. - The company acknowledges the impact of declining local government fiscal revenues on its operations, particularly due to reduced land transfer fees[14]. Strategic Initiatives - The company plans to adopt cautious strategies to reduce losses, including in-depth market analysis and risk assessment of strategic decisions[15]. - The company aims to explore new growth opportunities while maintaining business continuity and competitiveness under challenging market conditions[15]. - The company plans to focus on strengthening relationships with existing customers in the cigarette packaging business, which remains its primary revenue source[43]. - The company aims to explore new wastewater treatment projects to expand its revenue sources, supported by a solid technical background[43]. - The company will continue to seek business opportunities and adhere to its operational strategy to create more value for shareholders[44]. Corporate Governance - The company appointed independent non-executive directors with extensive experience in finance and law, enhancing governance and oversight[50]. - The company emphasizes a corporate culture of integrity, harmony, and excellence, aiming to provide high-quality products and services[56]. - The board held only two regular meetings this year, focusing on annual and interim performance reviews, which may indicate a need for more frequent oversight[58]. - The management did not submit monthly performance reports to the board as required, relying instead on regular updates before board meetings[59]. - The company is committed to maintaining high standards of corporate governance to ensure competitiveness and healthy growth[57]. - The new financial director has over 18 years of experience in auditing, accounting, and corporate finance, which strengthens the financial management team[54]. - The company has a significant focus on risk control and strategic planning, with key personnel involved in these areas[52]. - The company has not disclosed quarterly performance, which may affect transparency and investor confidence[58]. - The independent non-executive directors play a crucial role in audit and remuneration committees, ensuring accountability and fair practices[50]. - The board consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring a diverse range of business and professional expertise[63]. - The company aims to achieve and maintain at least 10% female representation in the board and senior management by December 31, 2024, with current gender ratio at approximately 70% male to 30% female[69]. - The nomination committee has established measurable targets for board diversity, considering factors such as gender, age, cultural background, and professional experience[70]. - The company has implemented a nomination policy to ensure qualified and competent board members, enhancing corporate strategy and shareholder value[71]. - Independent non-executive directors are required to meet independence standards as per listing rules, ensuring effective oversight and protection of shareholder interests[73]. - The company has arranged appropriate liability insurance for directors and senior management, with annual reviews of the coverage[65]. - The board is responsible for strategic decisions, performance monitoring, and ensuring compliance with applicable rules and regulations[64]. - The company encourages continuous professional development for all directors to enhance their knowledge and skills[80]. - The board retains the authority to select and approve candidates for board membership, with a third of directors required to retire and seek re-election at each annual general meeting[79]. - The audit committee's responsibilities include reviewing financial reports and monitoring the company's risk management and internal control systems[86]. - The company has established various committees, including the audit, remuneration, nomination, and corporate governance committees, to oversee specific matters[85]. - The attendance rate for the audit committee members was 100% for all meetings held[88]. - The company has adopted a standard code of conduct and confirmed compliance throughout the year[97]. - The audit committee was informed of the non-audit services provided by the auditor, which totaled HKD 1,834,000, including HKD 1,701,000 for audit services and HKD 133,000 for other services[99]. - The board confirmed its responsibility for maintaining effective risk management and internal control systems to protect shareholder interests and the group's assets[100]. - The company will distribute no less than 35% of the annual consolidated distributable profit as dividends, with the board retaining discretion over the declaration and payment[103]. - The company conducted a self-assessment to ensure compliance with risk and internal control policies, finding no significant irregularities[102]. - The board reviewed the effectiveness of the risk management and internal control systems and deemed them effective and sufficient[102]. - The company encourages shareholder participation in annual general meetings to facilitate dialogue with the board[108]. - The nomination committee has proposed the re-election of directors based on their contributions and skills, considering board diversity[92]. - The governance committee held one meeting this year to review compliance with governance policies and the company's ESG report[93]. - The company appointed a new company secretary following the retirement of the previous secretary[107]. - The company has established effective communication channels with shareholders, ensuring timely and equal access to information regarding overall performance[110]. Environmental, Social, and Governance (ESG) Initiatives - The company emphasizes the importance of ESG initiatives, integrating environmental management and social responsibility into its operational practices[116]. - The report covers the management policies and strategies related to ESG for the fiscal year 2023, focusing on two wholly-owned subsidiaries that contribute significantly to revenue[120]. - The company has a stakeholder engagement strategy that includes regular communication with shareholders, customers, employees, suppliers, and regulatory bodies to ensure long-term development goals are met[121]. - The company is committed to maintaining a stable and sustainable growth trajectory, with a focus on effective financial management and operational cost control[122]. - The company adheres to environmental regulations and pollution control laws, demonstrating compliance and commitment to sustainability[126]. - In 2023, the total carbon dioxide emissions for Shantou Xinda and Hongdong Governance were 3,329.75 tons, a decrease of approximately 8.5% compared to 2022[136]. - Shantou Xinda's volatile organic compounds (VOCs) emissions were 11.4 micrograms per cubic meter in 2023, significantly below the Guangdong provincial standard limit of 120 micrograms per cubic meter[132]. - The nitrogen oxides emissions for Shantou Xinda and Hongdong Governance totaled 0.7461 tons in 2023, an increase from 0.5704 tons in 2022[138]. - Shantou Xinda's total energy consumption decreased by approximately 8.5% in 2023 due to reduced business volume and equipment efficiency upgrades[137]. - The sulfur oxides emissions for Shantou Xinda and Hongdong Governance totaled 0.1059 tons in 2023, slightly higher than 0.0788 tons in 2022[142]. - Shantou Xinda's benzene emissions were 0.52 micrograms per cubic meter in 2023, well below the limit of 1 microgram per cubic meter[132]. - The total carbon dioxide emissions from liquefied petroleum gas were 1.00 ton in 2023, down from 28.00 tons in 2022[136]. - Shantou Xinda has implemented a comprehensive waste management policy, ensuring that hazardous waste is properly stored and collected[130]. - The company has established an emergency response plan for environmental incidents, which has been reviewed by experts and filed with relevant government departments[131]. - Regular maintenance of equipment and vehicles is conducted to ensure compliance with emissions regulations[135]. - In 2023, Shantou Xinda's solid waste generation increased to 6.200 tons, up from 4.554 tons in 2022, primarily due to a rise in waste ink liquid from 2.500 tons to 4.200 tons[145]. - The target for greenhouse gas emissions is to reduce CO2, NOx, and SOx emissions by 1% in 2024 compared to 2023 levels[150]. - The total harmless waste generated in 2023 was 25.63 tons, a decrease from 27.53 tons in 2022, with a goal to reduce this by 0.5% in the following year[148][154]. - Shantou Xinda aims to control material consumption within budget limits to achieve a 1% reduction in emissions per unit of output[157]. - The company has implemented measures to reduce energy consumption, including shutting down machines during non-production hours and optimizing air conditioning usage[158]. - The consumption of liquefied petroleum gas significantly decreased due to the switch to natural gas in the cafeteria[164]. - The total amount of harmful waste produced by Shantou Xinda was 6.200 tons in 2023, with no harmful solid waste generated by Hongdong Governance[145][156]. - The company is promoting the use of electric vehicles and shared bicycles to reduce greenhouse gas emissions during project inspections[152]. - The total harmless waste from Shantou Xinda was 19.43 tons in 2023, compared to 21.03 tons in 2022[148]. - The company is committed to using energy-efficient equipment and promoting paperless operations to minimize resource consumption[162]. - Total water consumption for 2023 was 25,915 tons, a decrease from 29,874 tons in 2022, representing a reduction of approximately 13.5%[166]. - The company aims to reduce water consumption and improve water efficiency through rainwater collection for irrigation and other uses[170]. - Shantou Xinda employed 57.36 tons of recyclable packaging materials in 2023, down from 62 tons in the previous fiscal year, indicating a reduction of about 7.3%[173]. Employee Management and Welfare - As of December 31, 2023, the total number of full-time employees was 288, with total employee compensation amounting to HKD 37,990,000[45]. - The company emphasizes fair employment practices, ensuring equal opportunities for all employees regardless of gender or disability[184]. - Employee welfare programs include social insurance, birthday celebrations, and performance-based bonuses to enhance job satisfaction and retention[185]. - 弘东治理在2023年12月31日的全职员工人数为60名，较2022年减少6名，员工性别比例为男性81.67%和女性18.33%[187]. - 汕头信达在2023年共有8名员工离职，较2022年的17名减少了53%，员工流失率显著下降[188]. - 弘东治理在2023年共有11名员工离职，较2022年的29名减少了62%[188]. - 汕头信达和弘东治理在过去三年内均未发生因工死亡事件，因工死亡率为零[190]. - 本年度，汕头信达和弘东治理均未发生工伤，因工伤损失的工作日数为零[191]. - 两家公司均已通过职业健康安全管理体系认证(GB/T45001-2020/ISO45001:2018)[189]. - 公司设立了职业安全监视小组，负责监测和测量职业健康安全参数[194]. - 本年度，汕头信达和弘东治理为各级员工提供了一系列高质量的技能培训课程，确保管理和生产等方面的行业领先地位[195]. - 弘东治理的员工年龄分布中，26-35岁年龄组占50%[187]. - 汕头信达的员工中，≥56岁年龄组占12.50%[188]. - Shantou Xinda provided training for a total of 665 employee sessions in the fiscal year 2023, an increase from 596 sessions in the fiscal year 2022[196]. - The total training hours reached 76 in fiscal year 2023, significantly up from 30 hours in fiscal year 2022[196]. - The average training hours per employee category were 4.0 hours for senior management, 2.0 hours for middle management, and 2.14 hours for other employees in fiscal year 2023[197]. - The percentage of training participation was 0.45% for senior management, 33.23% for middle management, and 66.32% for other employees in fiscal year 2023[197]. - In fiscal year 2023, Shantou Xinda conducted various training programs, including safety production operation training and quality management training, with participation ranging from 1 to 68 employees per session[199]. - Hongdong Governance provided training for a total of 59 employee sessions in fiscal year 2023, slightly up from 56 sessions in fiscal year 2022[200].

Financial Performance - Total revenue for the year ended December 31, 2023, was HKD 194,536,000, a decrease from HKD 194,536,000 in 2022[1] - The operating loss for the group was HKD 58,344,000, compared to a loss of HKD 53,107,000 in the previous year[1] - The net loss attributable to shareholders was HKD 41,184,000, improving from a loss of HKD 53,107,000 in 2022, resulting in a basic loss per share of HKD 5.87[10] - The group's total revenue for the year was approximately HKD 155,390,000, a decrease of about HKD 39,150,000 or 20.1% compared to HKD 194,540,000 in 2022[21] - Revenue decreased by 20.1% to HKD 155,390,000[72] - Gross profit decreased by 29.2% to HKD 33,300,000[72] - Operating loss decreased by 26.5% to HKD 42,860,000[72] - Loss attributable to owners of the company decreased by 22.5% to HKD 41,180,000[72] - Basic loss per share decreased by 22.5% to HKD 5.87[72] - The total comprehensive loss for the year amounted to HKD 46,059,000[74] Assets and Liabilities - The group's total assets as of December 31, 2023, amounted to HKD 488,498,000, down from HKD 577,266,000 in 2022[3] - The total liabilities of the group were HKD 173,297,000, a decrease from HKD 216,006,000 in the previous year[3] - As of December 31, 2023, the group's net asset value was HKD 315,200,000, down from HKD 361,260,000 in 2022; the operating cash surplus was HKD 174,660,000, compared to HKD 254,710,000 in 2022[40] - The total cash and restricted cash balance as of December 31, 2023, was approximately HKD 46,130,000, a decrease from HKD 91,230,000 in 2022[42] - The group had borrowings of approximately HKD 22,620,000, slightly up from HKD 22,390,000 in 2022, with an asset-to-liability ratio of 4.44%[44] - Total assets decreased from HKD 577,266,000 to HKD 488,498,000, a decline of approximately 15.4% year-over-year[79] - Total liabilities decreased from HKD 216,006,000 to HKD 173,297,000, a decline of about 19.7%[81] Revenue Breakdown - The group reported a significant decrease in revenue from cigarette packaging products, which was HKD 154,875,000 compared to HKD 167,582,000 in 2022[5] - Revenue from the cigarette packaging business was approximately HKD 154,880,000, down HKD 12,700,000 or 7.6% from HKD 167,580,000 in 2022[23] - Revenue from the environmental management business was approximately HKD 260,000, a significant decrease of HKD 26,380,000 or 99.0% compared to HKD 26,640,000 in 2022[24] - The environmental governance business reported a significant loss of HKD 28,175,000[93] Expenses - The overall gross profit for the year was approximately HKD 33,300,000, down from HKD 47,060,000 in 2022[25] - The overall gross profit margin decreased to 21.4% from 24.2% in 2022, primarily due to increased raw material prices and a decline in product prices[26] - Distribution costs for the year were approximately HKD 930,000, an increase of about 50% compared to approximately HKD 620,000 in 2022[28] - Administrative expenses for the year were approximately HKD 45,810,000, a decrease of 6.9% or about HKD 3,380,000 from HKD 49,190,000 in 2022[32] Corporate Governance and Future Plans - The company is committed to maintaining high standards of corporate governance to ensure competitiveness and healthy growth[57] - The company has adhered to the corporate governance code and will continue to review its governance practices regularly[59] - The company plans to invest more resources into new wastewater treatment projects to expand its revenue sources[54] - The company aims to strengthen relationships with existing customers and seek new customers to increase its market share in the cigarette packaging materials market[54] - The company will continue to explore opportunities in ecological restoration projects to enhance its market share[54] - The company anticipates intense competition in the cigarette packaging and environmental management sectors in 2024[52] Employment and Compensation - As of December 31, 2023, the company employed a total of 288 full-time employees, a decrease from 295 employees as of December 31, 2022[55] - Total employee compensation for the year amounted to HKD 37,990,000, down from HKD 43,160,000 in the previous year[55] Dividends - The group did not recommend any dividend for the year, consistent with the previous year[12] - The board does not recommend the payment of a final dividend for the year ending December 31, 2023[72] Miscellaneous - The company completed the sale of 48% equity in its subsidiary Shengshi Hengrui (Guangdong) Technology Co., Ltd. for a total consideration of RMB 3 million on November 17, 2023[51] - The annual general meeting is scheduled for June 26, 2024, with a suspension of share transfer registration from June 21 to June 26, 2024[56] - The company did not engage in any purchases, redemptions, or sales of its listed securities during the year[68] - Management did not submit monthly reports to the board as all directors were involved in daily operations and fully aware of the company's performance[67] - The company held two regular board meetings and three additional meetings for specific matters during the year[66]

Financial Performance - The company reported revenue of approximately HKD 70,740,000 for the six months ended June 30, 2023, a decrease of about HKD 7,470,000 or 10% compared to HKD 78,210,000 for the same period in 2022[5]. - The company incurred a loss of approximately HKD 8,440,000 during the reporting period, an increase of about HKD 680,000 or 9% from a loss of HKD 7,760,000 in the same period last year[5]. - Revenue for the six months ended June 30, 2023, was HKD 70,735,000, a decrease of 9.4% compared to HKD 78,213,000 for the same period in 2022[57]. - The group reported a loss before tax of HKD 9,089,000 for the six months ended June 30, 2023, compared to a loss of HKD 7,759,000 in the previous period[96]. - The total comprehensive loss for the six months ended June 30, 2023, was HKD 19,229,000, compared to HKD 27,252,000 for the same period in 2022, showing an improvement in overall loss performance[64]. Revenue Breakdown - Revenue from the cigarette packaging business was approximately HKD 70,810,000, an increase of HKD 1,550,000 or 2% compared to HKD 69,260,000 in the previous year[6]. - As of June 30, 2023, the group reported revenue of HKD 70,735 thousand, with the cigarette packaging business contributing HKD 70,806 thousand and the environmental governance business reporting a loss of HKD 121 thousand[92]. - For the six months ended June 30, 2023, the total revenue was HKD 70,806,000 for cigarette packaging and HKD 50,000 for agency services, totaling HKD 70,856,000, compared to HKD 69,928,000 in the same period of 2022[100]. Expenses and Losses - The overall gross profit for the reporting period was approximately HKD 17,920,000, an increase of HKD 4,080,000 or 29% from HKD 13,840,000 in the previous year, with a gross profit margin rising from 18% to 25%[7]. - Administrative expenses were approximately HKD 21,700,000, a decrease of about HKD 760,000 or 3% from HKD 22,460,000 in the same period last year[9]. - The group experienced an operating loss of HKD 8,400 thousand, with a net financing income of HKD 477 thousand, leading to a pre-tax loss of HKD 7,923 thousand[92]. - The company reported a net loss of HKD 8,073,000 for the six months ended June 30, 2023, compared to a net loss of HKD 7,342,000 for the same period in 2022, indicating an increase in losses of about 10%[64]. Cash Flow and Financial Position - The company had total cash and restricted cash of approximately HKD 68,120,000 as of June 30, 2023, a decrease from HKD 91,230,000 as of December 31, 2022[14]. - Cash flows from operating activities showed a net outflow of HKD 6,855,000 for the six months ended June 30, 2023, compared to a net inflow of HKD 31,649,000 in the previous year, representing a significant decline[65]. - The company's cash and cash equivalents decreased by HKD 16,262,000 during the first half of 2023, compared to an increase of HKD 22,180,000 in the same period of 2022[69]. - The total assets of the group as of June 30, 2023, amounted to HKD 504,455,000, a decrease from HKD 577,266,000 as of December 31, 2022[98]. Shareholder Information - The board did not recommend any interim dividend during the reporting period, consistent with the previous year[31]. - As of June 30, 2023, Mr. Zheng Yisheng holds 450,000,000 shares, representing 64.15% of the company's total issued shares[36]. - The total number of issued ordinary shares of the company is 701,430,000[40]. - The new share option plan allows for the issuance of up to 70,143,000 shares, which is 10% of the total issued shares as of June 16, 2023[42]. Governance and Compliance - The company has adopted and applied the corporate governance code as per the listing rules to enhance shareholder value[46]. - The audit committee reviewed the interim report and confirmed compliance with applicable accounting standards and legal requirements[54]. - The company maintained compliance with corporate governance codes, although there were deviations regarding the roles of the chairman and CEO[48]. Capital Expenditure and Commitments - Total capital expenditure during the review period was approximately HKD 7,990,000, significantly lower than HKD 46,030,000 for the same period in 2022[25]. - As of June 30, 2023, the group had capital commitments of approximately HKD 5,440,000, an increase from HKD 4,420,000 as of December 31, 2022[26]. Risk Management - The group’s financial risk management focuses on minimizing the impact of potential adverse factors on financial performance, with no changes to risk management policies since the end of the reporting period[81]. - The group’s cash and cash equivalents, restricted cash, and trade receivables are primarily held in reputable financial institutions in China and Hong Kong, with no significant credit risk identified[83].

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 因本公告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損 失承擔任何責任。 HUAXI HOLDINGS COMPANY LIMITED 華禧控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：01689） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 中 期 業 績 公 告 財務摘要 截至六月三十日止六個月 二零二三年 二零二二年 千港元 千港元 變動 收入 70,735 78,213 (9.56%) 本公司擁有人應佔虧損 (8,073) (7,342) 9.96% 每股基本虧損 (1.15)港仙 (1.05)港仙 9.52% ...

Financial Performance - The group's total revenue for the fiscal year ended December 31, 2022, was approximately HKD 194.54 million, a decrease of about 52% from HKD 404.56 million in the previous fiscal year[14]. - The tobacco packaging business generated revenue of approximately HKD 167.58 million, down from HKD 183.93 million, while the environmental governance business revenue fell to HKD 26.64 million from HKD 215.33 million, representing 86% and 14% of total revenue respectively[14]. - The company reported a loss attributable to shareholders of approximately HKD 53.11 million, which is an increase of 244% compared to the previous fiscal period[7]. - The overall gross profit was approximately HKD 47,060,000, down from HKD 115,700,000 in the previous fiscal year, with a gross margin of 24%, a decline of 5% from 29%[18]. - The gross profit from the cigarette packaging business was approximately HKD 58,430,000, with a gross margin of 35%, down from 40% in the previous fiscal year[18]. - The net loss attributable to the owners of the company was approximately HKD 53,110,000, a decrease of HKD 90,110,000 or 244% compared to a net profit of HKD 37,000,000 in the previous fiscal year[26]. - The total cash and cash equivalents at the end of the reporting period were approximately HKD 91,230,000, down from HKD 115,140,000 in the previous fiscal year[31]. - The net cash generated from operating activities was HKD 54,891,000, an increase from HKD 38,836,000 in the previous fiscal year[32]. - The distribution costs were approximately HKD 620,000, a decrease of about 13% from HKD 710,000 in the previous fiscal year[19]. - The company did not recommend any final dividend for the fiscal year ending December 31, 2022[27]. Business Strategy and Operations - The company plans to continue diversifying its business while consolidating its tobacco packaging materials operations and actively seeking opportunities in the ecological restoration sector[10]. - The company is responding to the challenges posed by the COVID-19 pandemic and geopolitical factors by implementing various measures to mitigate negative impacts on its business[6]. - The company aims to enhance management standards and operational efficiency in response to national investments in ecological restoration[6]. - The company acknowledges the ongoing economic recovery in China following the relaxation of COVID-19 measures, which is expected to boost global economic growth[6]. - The company is committed to exploring suitable investment opportunities to achieve revenue diversification and promote business development[10]. - The cigarette packaging business remains the primary revenue source for the group, with ongoing efforts to strengthen relationships with existing clients and seek new customers[39]. - The group plans to invest more resources into new wastewater treatment projects to expand revenue sources, supported by a solid technical background[39]. - The group anticipates growth in 2023 due to the easing of pandemic restrictions by the Chinese government, despite intense competition in the cigarette packaging and environmental governance sectors[39]. Corporate Governance - The company is committed to maintaining high standards of corporate governance to ensure competitiveness and healthy growth, adhering to the corporate governance code as per the Hong Kong Stock Exchange[55]. - The board consists of two executive directors, Zheng Yisheng and Zheng Mingsheng, one non-executive director, Hao Jiming, and three independent non-executive directors, including Liu Guoxiong, Huo Baotian, and Cai Xiaowen[56]. - The company has adopted the corporate governance code principles to align with the best interests of stakeholders[55]. - The board has complied with the relevant listing rules throughout the reporting period, ensuring regulatory adherence[56]. - The company has implemented a board diversity policy, considering factors such as gender, age, cultural background, and professional experience to enhance board composition[62]. - The board held five regular meetings and one annual general meeting during the year ending December 31, 2022[71]. - The attendance rate for the board members at the annual general meeting was 100%[72]. - The Audit Committee held two meetings to review the financial statements for the year ending December 31, 2021, and the interim results for the six months ending June 30, 2022[75]. - The Audit Committee consists of independent non-executive directors with relevant qualifications and experience[75]. - The Remuneration Committee convened once during the year to review the remuneration of directors and senior management[77]. - The company ensures that all directors participate in continuous professional development to update their knowledge and skills[70]. - The board has established various committees, including the Audit Committee and Remuneration Committee, to oversee specific matters[73]. - The company has received annual independence confirmation letters from all independent non-executive directors, affirming their independence[66]. - The company has a structured approach to appointing and re-electing directors, ensuring no director has a term exceeding three years without re-election[67]. - The company held one meeting of the Nomination Committee during the year ended December 31, 2022, to review the board's structure, size, composition, and diversity[80]. - The board is responsible for maintaining the risk management and internal control systems, ensuring effective monitoring of the company's operations[89]. - The company conducted an annual self-assessment to confirm compliance with risk and internal control policies, with no significant irregularities reported for the year ended December 31, 2022[90]. - The company’s governance structure includes a clear distinction between the roles of the Chairman and the CEO, although both roles are held by the same individual[83]. - The company’s board reviewed its internal control system's effectiveness and deemed it effective and adequate for the year ended December 31, 2022[90]. Environmental, Social, and Governance (ESG) Initiatives - The company’s ESG initiatives are overseen by the board and an ESG management team, focusing on sustainable development and compliance with environmental regulations[101]. - The board is responsible for formulating and disclosing key performance indicators related to ESG management, ensuring data accuracy and reliability[105]. - The company engages with stakeholders, including shareholders and customers, to align long-term development goals and maintain effective communication channels[107]. - The company has implemented strict wastewater management policies, ensuring that domestic wastewater is treated and complies with regulatory standards[114]. - The company reported that no industrial wastewater was generated during production, with domestic wastewater being the primary concern[114]. - The company has established a noise control policy, ensuring that noise emissions do not disturb surrounding residents[116]. - The company has implemented various energy-saving measures, including using LED lighting and adjusting air conditioning settings to reduce energy consumption[141]. - The company has adopted measures to promote tree planting and carpooling among employees to reduce emissions[127]. - The company encourages the use of shared bicycles and electric vehicles to minimize emissions from traditional vehicles[128]. - The group actively promotes green environmental activities among suppliers and conducts regular inspections[182]. - The group has established a system for monitoring and managing intellectual property rights, enhancing innovation awareness among employees[185]. Employee and Workplace Safety - The total employee compensation for the reporting period was HKD 43,160,000, compared to HKD 42,380,000 in the previous fiscal year, reflecting competitive remuneration practices[42]. - The company has implemented a comprehensive occupational health and safety management system to enhance workplace safety and employee well-being[159]. - The company has achieved zero employee fatalities due to work-related incidents over the past three years, maintaining a fatality rate of 0%[162]. - In the past year, the company reported no work-related injuries, indicating a strong safety record[163]. - A total of 596 training sessions were provided to employees, accumulating 30 hours of training time[168]. - The company has implemented strict compliance with occupational health and safety management systems, achieving certification under GB/T 45001–2020/ISO 45001:2018[161]. - The company adheres to labor laws and regulations to protect employee rights, preventing child labor and forced labor[173]. - The group strictly adheres to the laws and regulations regarding child labor and forced labor, with no significant violations reported during the reporting period[174]. - Regular safety training sessions are conducted quarterly to enhance employees' awareness of occupational health and safety[159]. Community Engagement and Anti-Corruption - The group actively participated in community activities and invested approximately 600,000 in ecological projects, contributing to environmental sustainability[192]. - The group has implemented anti-corruption policies and established reporting channels for employees to report misconduct[191]. - The group has not experienced any legal cases related to corruption during the reporting period[189]. - The group has set a target of achieving zero corruption complaints and zero corruption lawsuits for the year[189]. - The group has established guidelines for acceptable and unacceptable behaviors regarding gifts and interactions with government officials[190].

[Performance Summary](index=1&type=section&id=Performance%20Summary) The company's financial performance in FY2022 saw significant declines across key metrics, including revenue and a shift to operating loss [Key Performance Indicators for FY2022](index=1&type=section&id=Key%20Performance%20Indicators%20for%20FY2022) In FY2022, the company experienced significant declines across key financial metrics, including a 52% revenue decrease and a shift from operating profit to loss, resulting in a basic loss per share with no final dividend recommended FY2022 Performance Summary (HKD Million, except per share data) | Indicator | Change | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenue | ↓ 52% | 194.54 | 404.56 | | Gross Profit | ↓ 59% | 47.06 | 115.70 | | Operating (Loss)/Profit | ↓ 227% | (58.34) | 46.05 | | (Loss)/Profit Attributable to Owners of the Company | ↓ 244% | (53.11) | 37.00 | | Basic (Loss)/Earnings Per Share | ↓ 244% | (7.57) HK cents | 5.27 HK cents | | Final Dividend | Not Recommended | Nil | Nil | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated financial statements, including the statement of comprehensive income and statement of financial position [Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For 2022, the company reported total revenue of HKD 195 million, a 52% year-on-year decrease, leading to a loss of HKD 53.37 million from a profit of HKD 36.48 million in the prior year Consolidated Statement of Comprehensive Income Summary (HKD Thousand) | Item | 2022 | 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 194,536 | 404,559 | -51.9% | | Gross Profit | 47,056 | 115,699 | -59.3% | | Operating (Loss)/Profit | (58,344) | 46,045 | -226.7% | | (Loss)/Profit for the Year | (53,370) | 36,475 | -246.3% | | (Loss)/Profit Attributable to Owners of the Company | (53,107) | 36,996 | -243.6% | Basic (Loss)/Earnings Per Share | Item | 2022 | 2021 | | :--- | :--- | :--- | | Basic and Diluted (Loss)/Earnings Per Share | (7.57) HK cents | 5.27 HK cents | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 2022, the company's total assets decreased by 21% to HKD 577 million, with total equity declining by 20%, primarily due to reduced trade receivables and financial assets at fair value through profit or loss Consolidated Statement of Financial Position Summary (HKD Thousand) | Item | December 31, 2022 | December 31, 2021 | YoY Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current Assets | 114,021 | 56,978 | +100.1% | | Current Assets | 463,245 | 675,999 | -31.5% | | **Total Assets** | **577,266** | **732,977** | **-21.2%** | | **Liabilities and Equity** | | | | | Total Liabilities | 216,006 | 282,160 | -23.5% | | **Total Equity** | **361,260** | **450,817** | **-19.9%** | | **Total Equity and Liabilities** | **577,266** | **732,977** | **-21.2%** | [Notes to the Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the company's financial statements, including accounting policies, segment information, and specific asset/liability breakdowns [Company Information and Basis of Preparation](index=6&type=section&id=Company%20Information%20and%20Basis%20of%20Preparation) Wah Hei Holdings Limited, an investment holding company registered in the Cayman Islands, primarily engages in cigarette packaging material production and environmental ecological restoration in China, with financial statements prepared under Hong Kong Financial Reporting Standards - The Group primarily engages in (i) the production and sale of cigarette packaging materials; and (ii) environmental and ecological restoration and governance businesses in China[14](index=14&type=chunk) - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance, based on the historical cost convention[17](index=17&type=chunk)[66](index=66&type=chunk) [Revenue and Segment Information](index=8&type=section&id=Revenue%20and%20Segment%20Information) During the reporting period, total company revenue was HKD 195 million, with cigarette packaging contributing HKD 168 million (86%) and environmental governance revenue sharply declining by 88% to HKD 26.64 million (14%), with the latter's shift from profit to loss being a primary driver of the overall group loss Segment Performance Summary (HKD Thousand) | Item | 2022 | 2021 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | | | | | Cigarette Packaging Business | 167,582 | 183,925 | -8.9% | | Environmental Governance Business | 26,641 | 215,333 | -87.6% | | **Total** | **194,536** | **404,559** | **-51.9%** | | **Segment Results** | | | | | Cigarette Packaging Business | 6,253 | 25,326 | -75.3% | | Environmental Governance Business | (37,549) | 25,463 | Shift from Profit to Loss | - The number of new environmental governance projects significantly decreased due to the pandemic, leading to an **88% year-on-year decline** in this business segment's revenue, from HKD 215 million to HKD 26.64 million[28](index=28&type=chunk) [Basic (Loss)/Earnings Per Share and Dividends](index=14&type=section&id=Basic%28Loss%29%2FEarnings%20Per%20Share%20and%20Dividends) For 2022, the loss attributable to owners of the company was HKD 53.11 million, resulting in a basic loss per share of 7.57 HK cents, compared to earnings per share of 5.27 HK cents in the prior year, with no final or interim dividends recommended by the Board Basic (Loss)/Earnings Per Share Calculation | Item | 2022 | 2021 | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company (HKD Thousand) | (53,107) | 36,996 | | Weighted Average Number of Ordinary Shares Issued | 701,430,000 | 701,430,000 | | Basic (Loss)/Earnings Per Share | (7.57) HK cents | 5.27 HK cents | - The Board does not recommend the payment of any final dividend for the year ended December 31, 2022 (FY2021: Nil)[116](index=116&type=chunk)[125](index=125&type=chunk) [Receivables and Payables](index=15&type=section&id=Receivables%20and%20Payables) As of December 2022, net trade receivables decreased from HKD 391 million to HKD 221 million, but impairment provisions significantly increased from HKD 8.4 million to HKD 30.85 million, indicating higher credit risk, while trade and bills payables decreased from HKD 205 million to HKD 142 million Trade Receivables Movement (HKD Thousand) | Item | December 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Trade Receivables | 251,685 | 399,449 | | Less: Impairment Provision | (30,849) | (8,395) | | **Trade Receivables — Net** | **220,836** | **391,054** | Trade and Bills Payables (HKD Thousand) | Item | December 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Trade Payables | 103,349 | 161,311 | | Bills Payables | 38,835 | 43,295 | | **Total** | **142,184** | **204,606** | [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational and financial performance, capital structure, liquidity, and future strategic outlook [Business and Financial Review](index=17&type=section&id=Business%20and%20Financial%20Review) In 2022, the Group's overall performance declined due to the pandemic and market competition, with total revenue decreasing by 52% to HKD 195 million and gross margin falling from 29% to 24%, primarily driven by an 88% revenue reduction in the environmental governance business, further exacerbated by fair value changes in financial assets and increased impairment losses, resulting in a loss attributable to owners of the company of HKD 53.11 million - The Group's total revenue was approximately **HKD 195 million**, a decrease of approximately **52%** from HKD 405 million in FY2021[111](index=111&type=chunk) - The overall gross profit margin was **24%**, a 5 percentage point decrease from 29% in FY2021, primarily due to losses in the environmental governance business and increased raw material prices in the cigarette packaging business[158](index=158&type=chunk) - Net impairment loss on financial and contract assets was approximately **HKD 28.41 million**, an increase of approximately **HKD 8.42 million** year-on-year, mainly due to increased credit risk from specific agency service clients[30](index=30&type=chunk) - The Group recorded an unrealized loss of approximately **HKD 28.43 million** on financial assets at fair value through profit or loss (2021: HKD 11.73 million) due to unfavorable securities market conditions[53](index=53&type=chunk) - The loss attributable to owners of the company was approximately **HKD 53.11 million**, a decrease of approximately **244%** from a profit of HKD 37 million in the prior year[186](index=186&type=chunk) [Capital Structure, Liquidity, and Financial Resources](index=21&type=section&id=Capital%20Structure%2C%20Liquidity%2C%20and%20Financial%20Resources) As of December 2022, the Group's net assets were HKD 361 million with ample working capital, experiencing a net cash inflow from operating activities of HKD 54.89 million but a net cash outflow from investing activities of HKD 93.52 million, with capital expenditures significantly increasing to HKD 69.47 million and new bank borrowings of HKD 22.39 million, while no gearing ratio was presented Cash Flow Summary (HKD Thousand) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 54,891 | 38,836 | | Net Cash Used in Investing Activities | (93,518) | (16,825) | | Net Cash from/(Used in) Financing Activities | 20,234 | (58,353) | | Net Decrease in Cash and Cash Equivalents | (18,393) | (36,342) | | **Cash and Cash Equivalents at Year End** | **47,270** | **70,599** | - The Group's total capital expenditure was approximately **HKD 69.47 million**, a significant increase from HKD 6.24 million in the prior year[37](index=37&type=chunk) - As of the end of 2022, the Group incurred new bank borrowings of approximately **HKD 22.39 million**, repayable within one year[54](index=54&type=chunk) - As of the end of 2022, the Group's net assets were **HKD 361 million**, with a working capital surplus of **HKD 255 million**[118](index=118&type=chunk) [Future Outlook and Prospects](index=23&type=section&id=Future%20Outlook%20and%20Prospects) Looking ahead, with the easing of pandemic controls, the Group anticipates economic growth in 2023 and will continue its diversified development strategy, strengthening the cigarette packaging business while actively seeking new opportunities in wastewater treatment and ecological restoration projects to expand revenue streams and create shareholder value - The cigarette packaging business remains the Group's primary revenue source, and efforts will continue to strengthen customer relationships and seek new clients to expand market share[147](index=147&type=chunk) - The Group will invest more resources in identifying new wastewater treatment projects and exploring development opportunities in ecological restoration projects to increase market share[40](index=40&type=chunk) - Management will continue to adhere to the concentric diversification strategy, seeking business opportunities to create more value for shareholders[55](index=55&type=chunk) [Corporate Governance and Other Information](index=24&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's corporate governance practices and other relevant information, including compliance with codes and audit committee reviews [Corporate Governance Practices](index=24&type=section&id=Corporate%20Governance%20Practices) The company is committed to maintaining high standards of corporate governance, having complied with most provisions of the Corporate Governance Code during the reporting period, with a noted deviation where the roles of Chairman and Chief Executive Officer are combined by Mr. Zheng Yisheng, which the Board believes does not create an imbalance of power given the current business scale - The Directors believe that the company has complied with the applicable code provisions of the Corporate Governance Code during the reporting period, with certain deviations[62](index=62&type=chunk) - The company deviated from code provision A.2.1, which states that the roles of Chairman and Chief Executive Officer should be separate; Mr. Zheng Yisheng concurrently holds both positions, but the Board believes this arrangement does not lead to an imbalance of power and authority[150](index=150&type=chunk)[183](index=183&type=chunk) [Audit Committee and Other Matters](index=26&type=section&id=Audit%20Committee%20and%20Other%20Matters) The Audit Committee, comprising three independent non-executive directors, has reviewed the annual results and accounting principles for the period, during which the company did not purchase, sell, or redeem any listed securities and maintained sufficient public float - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and the Group's annual results for the reporting period[48](index=48&type=chunk) - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[176](index=176&type=chunk) - The company maintained sufficient public float during the reporting period and up to the date of this announcement[153](index=153&type=chunk)

Financial Performance - The company's revenue for the six months ended June 30, 2022, was approximately HKD 78.21 million, a decrease of about 65% compared to HKD 223.79 million for the same period in 2021[6]. - The company recorded a loss attributable to shareholders of approximately HKD 7.34 million, compared to a profit of HKD 42.5 million in the same period of 2021[13]. - Gross profit for the reporting period was approximately HKD 13.84 million, down from HKD 70.19 million in 2021, resulting in a gross profit margin decrease from 31% to 18%[7]. - Revenue from the cigarette packaging business was approximately HKD 69.26 million, down from HKD 99.41 million in the same period of 2021[6]. - Revenue from environmental remediation business was approximately HKD 8.76 million, significantly down from HKD 121.27 million in the same period of 2021[6]. - Operating loss for the six months ended June 30, 2022, was HKD 14,323 thousand, compared to an operating profit of HKD 51,651 thousand in the previous year[66]. - The net loss for the period was HKD 7,759 thousand, a stark contrast to the net profit of HKD 42,198 thousand reported in the same period of 2021[66]. - The group reported a total revenue of HKD 78,213,000 for the six months ended June 30, 2022, a decrease from HKD 223,787,000 in the same period of 2021[151]. Assets and Liabilities - The company's net asset value as of June 30, 2022, was approximately HKD 423.44 million, down from HKD 450.82 million as of December 31, 2021[14]. - Total assets as of June 30, 2022, amounted to HKD 635,853 thousand, down from HKD 732,977 thousand as of December 31, 2021[71]. - Current assets decreased to HKD 536,385 thousand from HKD 675,999 thousand, indicating a reduction in liquidity[71]. - The total equity attributable to the owners of the company was HKD 423,443 thousand, compared to HKD 450,817 thousand in the previous year[74]. - The group’s liabilities totaled HKD 212,410,000 as of June 30, 2022, with segment liabilities in cigarette packaging at HKD 110,124,000 and environmental governance at HKD 264,200,000[145]. - The group’s total liabilities increased from HKD 282,160,000 as of December 31, 2021, to HKD 212,410,000 as of June 30, 2022[149]. Cash Flow - Operating cash flow for the six months ended June 30, 2022, was HKD 35,476,000, an increase of 30.5% compared to HKD 27,237,000 in 2021[91]. - Net cash from operating activities increased to HKD 31,649,000 from HKD 19,408,000, representing a growth of 62.5%[91]. - Cash used in investing activities was HKD 31,832,000, a significant decrease from HKD 11,468,000 in the previous year[93]. - Cash flow from financing activities generated HKD 22,363,000, compared to a cash outflow of HKD 28,975,000 in 2021[93]. - Total cash and cash equivalents at the end of the period stood at HKD 88,715,000, down from HKD 106,989,000 in the previous year[93]. - The company reported a net increase in cash and cash equivalents of HKD 22,180,000, compared to an increase of HKD 1,901,000 in the same period last year[93]. Employee and Administrative Expenses - Administrative expenses for the reporting period were approximately HKD 22.46 million, a decrease of about HKD 3.32 million compared to HKD 25.78 million in 2021[8]. - The total number of employees as of June 30, 2022, was 314, a decrease from 341 employees on June 30, 2021[30]. - The group’s employee costs, including director remuneration, were HKD 20,217,000 for the six months ended June 30, 2022, slightly up from HKD 19,680,000 in the previous year[159]. Dividends and Shareholder Returns - The group did not recommend any interim dividend during the reporting period, compared to an interim dividend of HKD 0.04 per share in the previous year[32]. - The company paid HKD 421,000 in dividends during the reporting period, compared to no dividends paid in the previous year[93]. - The basic loss per share for the six months ended June 30, 2022, was HKD (1.05) compared to earnings of HKD 6.06 per share in the previous year[170]. - The company did not declare an interim dividend for the six months ended June 30, 2022, while it declared a dividend of HKD 0.04 per share for the same period in 2021[172]. Risk Management and Governance - The group has established sufficient risk management procedures to identify and control various risks in line with the best interests of the organization and its shareholders[35]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules[53]. - There were no significant legal or regulatory non-compliance issues reported during the review period[61]. Business Strategy and Future Outlook - The group plans to continue consolidating its cigarette packaging business and strengthen relationships with existing customers despite the ongoing impact of the COVID-19 pandemic[29]. - The group is actively seeking business and investment opportunities to maximize shareholder value amid a challenging economic environment[29]. - The group has not made any significant acquisitions or disposals of subsidiaries during the reporting period[31].

Financial Performance - For the year ended December 31, 2021, the group's revenue was approximately HKD 404,560,000, with a profit attributable to the owners of the company of approximately HKD 37,000,000[14]. - The total revenue for the fiscal year ended December 31, 2021, was approximately HKD 404,560,000, an increase of about HKD 31,170,000 or 8% compared to HKD 373,390,000 in the fiscal year 2020[23]. - The cigarette packaging business generated revenue of approximately HKD 183,930,000, a decrease of HKD 13,140,000 or 7% from HKD 197,070,000 in the fiscal year 2020[24]. - The environmental management business recorded revenue of approximately HKD 215,330,000, an increase of about HKD 42,750,000 compared to the previous year[26]. - The overall gross profit for the fiscal year was approximately HKD 115,700,000, down from HKD 151,640,000 in the fiscal year 2020, resulting in a gross margin decrease from 41% to 29%[30]. - The net profit attributable to the owners of the company was approximately HKD 37,000,000, a decrease of about HKD 57,280,000 or 61% compared to HKD 94,280,000 in the fiscal year 2020[39]. Economic Environment - The company anticipates continued economic recovery driven by potential supportive policies from the central government, despite facing significant challenges in the current business environment[13]. - The overall economic environment remains challenging due to the impact of COVID-19 and energy consumption control policies, affecting production costs and business operations[11]. - The average unit price of raw materials such as paper and lead foil has increased due to production restrictions in high-energy-consuming industries[11]. Business Strategy and Opportunities - The group is actively participating in water environment restoration projects, including drainage network construction, contributing to national pollution prevention efforts[18]. - The company plans to explore new opportunities in the environmental protection industry, particularly in response to the national strategy for carbon peak by 2030 and carbon neutrality by 2060[19]. - The group aims to innovate low-carbon green technology systems for rural black and odorous water treatment, expanding its environmental remediation business in Guangdong[19]. - The company is also exploring business expansion related to the establishment of the Giant Panda National Park, which is expected to drive social and economic development[19]. - The group plans to continue focusing on the cigarette packaging business as its main revenue source and aims to explore new business opportunities in the market[55]. Employee and Operational Insights - The company acknowledges the resilience and efforts of its employees in navigating unprecedented challenges during the year[14]. - The group employed a total of 329 full-time employees as of December 31, 2021, down from 348 the previous year, with total employee compensation amounting to HKD 42,380,000[54]. - The distribution costs increased by approximately 87% to HKD 710,000 from about HKD 380,000 in the previous year[31]. - Administrative expenses rose by approximately HKD 7,050,000 to about HKD 49,940,000, primarily due to increased employee costs[32]. Corporate Governance - The company has a strong focus on corporate governance, with various committees in place to oversee audit, remuneration, and nomination processes[66]. - The board of directors includes independent non-executive directors with extensive experience in finance, law, and corporate governance, enhancing the company's oversight capabilities[66][69]. - The company has adopted high standards of corporate governance in line with the Hong Kong Stock Exchange's guidelines[132]. - The board of directors confirmed their responsibility for preparing the consolidated financial statements for the fiscal year ending December 31, 2021, ensuring they reflect the group's financial position and performance accurately[176]. Risk Management - The company focuses on risk management and regularly reviews its investment and expansion strategies, business plans, and financial performance indicators to control and manage business risks[81]. - The group has adopted financial risk management policies to control financial risks, including tax, currency, and financial reporting risks[82]. - The internal control and risk management systems have been evaluated, with no significant irregularities reported, ensuring effective monitoring of the group's operations[181]. Shareholder Engagement - The company emphasizes the importance of key performance indicators in analyzing its business and performance during the reporting period[77]. - The board emphasizes the importance of communication with shareholders, utilizing various channels for ongoing dialogue and feedback[189]. - The company encourages shareholder participation in annual general meetings to facilitate discussions with the board[190]. Environmental, Social, and Governance (ESG) Initiatives - The company is committed to environmental, social, and governance (ESG) initiatives, with a dedicated ESG team overseeing compliance and risk management related to these areas[194]. - The company is focused on sustainable development while pursuing high product quality and service standards[195].

Revenue and Profitability - The group's revenue for the six months ended June 30, 2021, was approximately HKD 223,790,000, an increase of about HKD 14,690,000 or 7.0% compared to HKD 209,100,000 for the same period in 2020[8]. - Revenue from the cigarette packaging business was approximately HKD 99,410,000, a decrease from HKD 114,820,000 in 2020, with sales of cigarette packaging materials contributing HKD 98,010,000[9]. - The environmental governance business recorded revenue of approximately HKD 121,270,000, an increase of 28.6% compared to HKD 94,280,000 in 2020[9]. - The overall gross profit for the reporting period was approximately HKD 70,190,000, a decrease of HKD 5,530,000 or 7.3% from HKD 75,720,000 in 2020, with a gross profit margin dropping from 36% to 31%[10]. - The basic earnings per share for the reporting period were HKD 0.0606, down from HKD 0.0642 in 2020[17]. - Net profit for the period was HKD 42,198,000, a decrease of 7.06% from HKD 45,473,000 in 2020[73]. - The group reported a net gain of HKD 8,215,000 from other income for the six months ended June 30, 2021, compared to HKD 1,000,000 in the same period of 2020, reflecting a substantial increase[175]. Expenses and Liabilities - Administrative expenses for the reporting period were approximately HKD 25,780,000, an increase of about HKD 2,940,000 or 12.9% compared to HKD 22,840,000 in 2020[13]. - Total liabilities increased to HKD 254,961,000 from HKD 189,691,000, indicating a rise of 34.38%[82]. - The group’s total liabilities as of June 30, 2021, were HKD 254,961,000, with current tax liabilities amounting to HKD 25,947,000 and deferred tax liabilities of HKD 12,108,000[156]. Cash Flow and Investments - The group’s cash and cash equivalents totaled approximately HKD 106,990,000 as of June 30, 2021, compared to HKD 103,280,000 as of December 31, 2020[19]. - The net cash generated from operating activities for the six months ended June 30, 2021, was HKD 19,408,000, down from HKD 23,902,000 in 2020, representing a decrease of 18.66%[103]. - The cash flow from investing activities showed a net inflow of HKD 11,468,000 for the first half of 2021, compared to a net outflow of HKD 19,535,000 in the same period of 2020[105]. - The company reported a decrease in cash flow used in financing activities, which amounted to HKD 28,975,000 for the first half of 2021, compared to HKD 19,512,000 in the same period of 2020[105]. Assets and Equity - The net asset value as of June 30, 2021, was HKD 476,500,000, up from HKD 456,940,000 as of December 31, 2020[19]. - Total assets as of June 30, 2021, amounted to HKD 731,461,000, an increase from HKD 646,629,000 as of December 31, 2020[81]. - The company’s total equity as of June 30, 2021, was HKD 252,455,000, an increase from HKD 226,682,000 at the end of June 2020, reflecting an increase of 11.36%[99]. Corporate Governance and Management - The company has established sufficient risk management procedures to identify and control various risks in line with the best interests of the group and its shareholders[54]. - The company has adopted and applied the corporate governance code as per the Hong Kong Stock Exchange's listing rules, ensuring compliance during the review period[59]. - The roles of the Chairman and CEO are held by the same individual, Zheng Yisheng, which the board believes does not imbalance the authority between the board and management[60]. Employee and Operational Insights - The total number of employees as of June 30, 2021, was 341, a slight decrease from 344 as of June 30, 2020[34]. - The group aims to enhance production efficiency and inventory management to control production costs amid tightening tobacco control policies in China[33]. - The group’s employee costs, including directors' remuneration, rose to HKD 19,680,000 for the six months ended June 30, 2021, compared to HKD 17,195,000 in the previous year, marking an increase of about 14.5%[173]. Future Outlook and Strategic Plans - The group expects to continue investing in new environmental projects to enhance revenue streams in the future[9]. - The group plans to develop new integrated water treatment projects across Guangdong Province, responding to stricter environmental protection policies[33]. - The company continues to engage in the production and sale of cigarette packaging materials and environmental remediation services in China, indicating ongoing market focus and expansion strategies[109].

汉 HUAXI HOLDINGS COMPANY LIMITED 華禧控股有限公司 ( 於 開 曼 群島 註 冊 成 立 的 有 限 公 司) 股份代號 : 1689 20 20 年 報 目錄 | --- | --- | |-------------------------------------------|----------| | | | | | | | 公 司 資 料 | | | 主 席 報 告 | | | 管 理 層 討 論 及 分 董 事 及 高 級 管 理 | 析 人 員 | | | | | 董 事 會 報 告 | | | 企 業 管 治 報 告 | | | 環 境 、 社 會 及 管 | 治 報 | | 獨 立 核 數 師 報 告 | | | 綜 合 全 面 收 益 表 | | | 綜 合 財 務 狀 況 表 | | | 綜 合 權 益 變 動 表 | | | 綜 合 現 金 流 量 表 | | | 綜 合 財 務 報 表 附 | 註 | | 五 年 財 務 摘 要 | | | | | 2 3 5 簡介10 12 21 告30 51 56 57 59 60 61 120 | --- | --- ...