Financial Performance - The gross profit from wigs, wig accessories, and others increased by HKD 4.1 million to HKD 199.2 million for the year ended December 31, 2024, representing a growth of 2.1%[3] - The gross profit margin for this category remained stable at 22.6%, primarily due to effective cost control measures implemented during the year[3] Dividend Proposal - The board has proposed a final dividend of HKD 0.028 per share for the year, compared to HKD 0.029 per share in 2023, pending shareholder approval[4]

Financial Performance - The revenue for the year ended December 31, 2024, was HKD 1,016.4 million, an increase of 3.8% compared to HKD 979.2 million for the year ended December 31, 2023[3]. - The net profit for the year was HKD 39.7 million, a decrease of 17.6% from HKD 48.2 million for the year ended December 31, 2023[3]. - The basic earnings per share attributable to equity shareholders was approximately HKD 0.06, a decrease of about 25.0% compared to HKD 0.08 for the previous year[3]. - The total comprehensive income attributable to owners showed a significant drop, with a loss of HKD 7,345,000 in 2024 compared to a profit of HKD 34,471,000 in 2023[5]. - The group reported a pre-tax profit of HKD 12,828,000 in 2024, compared to HKD 11,684,000 in 2023, indicating an increase of 9.8%[32]. - The group's net profit for the year was HKD 39.7 million, a decrease of HKD 8.5 million or 17.6% compared to HKD 48.2 million for the year ended December 31, 2023, primarily due to increased labor costs and financing costs[77]. Revenue Breakdown - Revenue from high-end hair extension products increased significantly by 36.3% to HKD 109,678,000 from HKD 80,423,000[20]. - The group reported a decrease in revenue from Halloween products, which fell by 32.7% to HKD 24,621,000 from HKD 36,561,000[20]. - Revenue from wigs and related products increased by 2.3% to HKD 882.1 million, supported by stable demand for lower-margin braid products[60]. - The revenue contribution from the Bangladesh factory accounted for 98.9% of the group's total revenue, up from 98.7% in the previous year[59]. - The group's revenue increased to HKD 1,016.4 million, representing a 3.8% increase compared to HKD 979.2 million for the year ended December 31, 2023, primarily due to higher sales of human hair extension and lace wig products[55]. Expenses and Costs - The total administrative expenses for the year were HKD 132.5 million, compared to HKD 119.1 million for the previous year[4]. - The financing costs for the year were HKD 42.4 million, an increase from HKD 36.8 million in the previous year[4]. - The total employee expenses for the year were HKD 354.7 million, up from HKD 308.7 million in the previous year[88]. - The group's sales cost increased by 3.6% to HKD 772.8 million, mainly due to rising direct labor costs and expenses related to the new hair design business and acquisitions[63]. Assets and Liabilities - Non-current assets decreased from HKD 646,996,000 in 2023 to HKD 602,912,000 in 2024, a reduction of approximately 6.8%[7]. - Current assets also saw a decline, dropping from HKD 984,570,000 in 2023 to HKD 932,027,000 in 2024, a decrease of about 5.3%[7]. - The total equity attributable to owners decreased from HKD 851,626,000 in 2023 to HKD 800,139,000 in 2024, a decline of approximately 6%[8]. - The company’s total liabilities decreased from HKD 734,054,000 in 2023 to HKD 668,917,000 in 2024, a reduction of about 8.9%[7]. - The company’s non-current borrowings increased from HKD 35,172,000 in 2023 to HKD 55,176,000 in 2024, an increase of approximately 56.9%[8]. Dividends and Share Capital - The board has proposed a final dividend of HKD 0.028 per share, along with an interim dividend of HKD 0.030 per share, totaling HKD 0.058 per share, with a payout ratio of approximately 95.1%[3]. - The company declared an interim dividend of HKD 3.0 cents per share for 2024, down from HKD 4.2 cents per share in 2023, representing a decrease of 28.6%[34]. - As of December 31, 2024, the total issued and paid-up share capital was HKD 6,467,000, down from HKD 6,557,000 in 2023[48]. - The company repurchased a total of 8,978,000 ordinary shares at a total cost of approximately HKD 5.7 million during the year, which is expected to enhance the net asset value and/or earnings per share[103]. Corporate Governance and Compliance - The company has adopted the Corporate Governance Code as its corporate governance standard[105]. - The audit committee confirmed that the consolidated financial statements for the year ended December 31, 2024, were prepared in accordance with applicable accounting standards and fairly presented the financial position and performance of the group[110]. - The company has complied with the Corporate Governance Code throughout the year[107]. Future Outlook - The group plans to expand its sales team and develop product lines to meet customer demands and expectations[95]. - The group anticipates a steady increase in market demand for hair and hair extension products until the end of 2025[95]. - The group has no major investments or acquisitions planned for the current year[93].

[Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of the company's governance structure, including its board and committees, along with essential contact and operational details [Board of Directors and Committees](index=2&type=section&id=Board%20of%20Directors%20and%20Committees) The company's board comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure robust corporate governance - The Board of Directors includes Executive Directors Mr. Cheung Yau Chong (Chairman and CEO), Mr. Chan Kwok Keung, Ms. Jia Ziying, Mr. Li Yanbo, Non-Executive Director Mr. Chan Lau Yee, and Independent Non-Executive Directors Mr. Sin Hon Di, Mr. Sze-to Yuk Ting, and Ir. Cheung Siu Wah[1](index=1&type=chunk) - The company has an Audit Committee (Chairman: Mr. Sin Hon Di), a Remuneration Committee (Chairman: Mr. Sze-to Yuk Ting), and a Nomination Committee (Chairman: Mr. Cheung Yau Chong)[1](index=1&type=chunk) [Key Contact Information](index=2&type=section&id=Key%20Contact%20Information) The company lists its principal bankers, legal advisors, registered office, main Hong Kong business location, share registrar, listing venue, and website for key operational and contact details - Principal bankers include Bank of China (Hong Kong), The Hongkong and Shanghai Banking Corporation Limited, and Fubon Bank (Hong Kong)[2](index=2&type=chunk) - The Hong Kong share registrar is Tricor Investor Services Limited, and the company's shares are listed on The Stock Exchange of Hong Kong Limited (Stock Code: 1962)[2](index=2&type=chunk) - The company's website is www.epfhk.com[2](index=2&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the group's operational performance, financial results, and future outlook for the reporting period [Business Review](index=5&type=section&id=Business%20Review) The Group's revenue increased by 9.6% to HK$525.2 million in H1 2024, driven by strong sales of braids and specialty braided products, and a steady recovery in human hair extension products Key Financial Indicators for H1 2024 | Indicator | H1 2024 (HK$ Million) | H1 2023 (HK$ Million) | Y-o-Y Change (%) | | :------------------ | :-------------------- | :-------------------- | :--------------- | | Revenue | 525.2 | 479.2 | 9.6 | | Gross Profit Margin | 22.4% | 23.0% | -0.6pp | | Net Profit Margin | 4.5% | 6.2% | -1.7pp | - Revenue growth was primarily driven by strong sales of lower-margin **braids and specialty braided products** and a steady recovery in higher-margin **human hair extension products**[4](index=4&type=chunk) - The decrease in gross profit margin was mainly due to the implementation of a new minimum gross wage in Bangladesh, partially offset by the continuous depreciation of the **Bangladeshi Taka against the US Dollar**[4](index=4&type=chunk) - The decline in net profit margin was attributed to increased finance costs due to sustained high interest rates, higher start-up and ongoing expenses for the new hair styling business, and the expiry of the income tax holiday in Bangladesh[4](index=4&type=chunk) [Outlook](index=5&type=section&id=Outlook) The Group plans to pursue growth strategies, including optimizing financial performance, expanding online presence, and entering the hair styling business, anticipating continued recovery in demand for higher-margin products - The Group will continue to strengthen financial performance optimization measures across its businesses[5](index=5&type=chunk) - Plans include opening more online stores on several well-known cross-border e-commerce platforms and venturing into the hair styling business to expand sales channels and customer base[5](index=5&type=chunk) - Demand for higher-margin products is expected to continue recovering until the end of the year[5](index=5&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) The Group's financial performance declined year-on-year due to increased finance costs, new business start-up expenses, and the expiry of Bangladesh's income tax holiday, despite a 9.6% revenue growth - Financial performance significantly declined this period, primarily due to increased finance costs from sustained high interest rates, higher start-up and ongoing expenses for the new hair styling business, and increased income tax and deferred tax expenses due to the expiry of the income tax holiday in Bangladesh[6](index=6&type=chunk) [Revenue](index=6&type=section&id=Revenue) Revenue increased by 9.6% to HK$525.2 million, driven by wigs, hair accessories, and high-end human hair extension products, with the US remaining the primary market Revenue by Product Category (HK$ Million) | Product Category | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :------------------------------ | :------ | :------ | :--------------- | | Wigs, Hair Accessories and Others | 441.8 | 394.0 | 12.1 | | High-end Human Hair Extension Products | 65.1 | 54.2 | 20.1 | | Halloween Products | 18.3 | 31.0 | -41.0 | | **Total Revenue** | **525.2** | **479.2** | **9.6** | - Revenue from hair products manufactured at the Bangladesh factory accounted for **98.9%** of the Group's total revenue (H1 2023: 98.6%)[7](index=7&type=chunk) - The United States remained the Group's primary market, contributing **92.1%** of total revenue (H1 2023: 89.6%)[7](index=7&type=chunk) [Cost of Sales](index=7&type=section&id=Cost%20of%20Sales) Cost of sales increased by 10.4% to HK$407.6 million, aligning with revenue growth and impacted by the new minimum wage in Bangladesh Cost of Sales by Product Category (HK$ Million) | Product Category | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :------------------------------ | :------ | :------ | :--------------- | | Wigs, Hair Accessories and Others | 351.2 | 312.0 | 12.6 | | High-end Human Hair Extension Products | 44.2 | 36.8 | 19.8 | | Halloween Products | 12.1 | 20.3 | -40.2 | | **Total Cost of Sales** | **407.6** | **369.2** | **10.4** | - The increase in cost of sales was primarily due to higher direct labor costs resulting from the implementation of a new minimum gross wage in Bangladesh[9](index=9&type=chunk) [Gross Profit](index=7&type=section&id=Gross%20Profit) Gross profit increased by 6.9% to HK$117.6 million, but the gross profit margin slightly decreased by 0.6 percentage points to 22.4%, mainly due to increased manufacturing expenses Gross Profit and Gross Profit Margin by Product Category (HK$ Million) | Product Category | Gross Profit H1 2024 | Gross Profit H1 2023 | Y-o-Y Change (%) | Gross Profit Margin H1 2024 | Gross Profit Margin H1 2023 | Change (pp) | | :------------------------------ | :------------------- | :------------------- | :--------------- | :-------------------------- | :-------------------------- | :---------- | | Wigs, Hair Accessories and Others | 90.6 | 82.0 | 10.5 | 20.5% | 20.8% | -0.3 | | High-end Human Hair Extension Products | 20.9 | 17.4 | 20.4 | 32.1% | 32.0% | +0.1 | | Halloween Products | 6.1 | 10.7 | -42.5 | 33.5% | 34.4% | -0.9 | | **Total Gross Profit** | **117.6** | **110.0** | **6.9** | **22.4%** | **23.0%** | -0.6 | - The slight decrease in gross profit margin was mainly due to an increase in total manufacturing overheads during the period[10](index=10&type=chunk) [Other Income](index=8&type=section&id=Other%20Income) Other income increased by 40.7% to HK$4.1 million, primarily driven by higher bank interest and rental income Other Income (HK$ Million) | Indicator | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :--------- | :------ | :------ | :--------------- | | Other Income | 4.1 | 2.9 | 40.7 | - The increase was mainly due to higher bank interest income and rental income during the period[12](index=12&type=chunk) [Other Gains and Losses](index=8&type=section&id=Other%20Gains%20and%20Losses) Other gains and losses increased by 11.9% to HK$2.9 million, primarily from foreign exchange gains, partially offset by fair value losses on financial assets Other Gains and Losses (HK$ Million) | Indicator | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :----------------- | :------ | :------ | :--------------- | | Other Gains and Losses | 2.9 | 2.6 | 11.9 | - This period primarily included a loss of **HK$0.2 million** from changes in fair value of financial assets measured at fair value through profit or loss, and a gain of **HK$3.2 million** from foreign currency exchange[13](index=13&type=chunk) [Impairment Losses under Expected Credit Loss Model](index=8&type=section&id=Impairment%20Losses%20under%20Expected%20Credit%20Loss%20Model) Impairment provisions for trade receivables remained stable at approximately HK$0.1 million for the period Impairment Provisions for Trade Receivables (HK$ Million) | Indicator | H1 2024 | H1 2023 | | :----------------- | :------ | :------ | | Impairment Provisions | 0.1 | 0.1 | [Distribution and Selling Expenses](index=8&type=section&id=Distribution%20and%20Selling%20Expenses) Distribution and selling expenses increased by 15.3% to HK$13.2 million, mainly due to higher transportation and commission expenses Distribution and Selling Expenses (HK$ Million) | Indicator | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :------------------------- | :------ | :------ | :--------------- | | Distribution and Selling Expenses | 13.2 | 11.4 | 15.3 | - The increase was mainly due to higher transportation and commission expenses during the period[15](index=15&type=chunk) [Administrative Expenses](index=8&type=section&id=Administrative%20Expenses) Administrative expenses slightly increased by 1.0% to HK$61.5 million, primarily due to higher salaries and employee benefits from increased headcount for the new hair styling business Administrative Expenses (HK$ Million) | Indicator | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :------------------- | :------ | :------ | :--------------- | | Administrative Expenses | 61.5 | 60.9 | 1.0 | - The increase was mainly due to higher salaries and employee benefits (including directors' emoluments) resulting from increased headcount for the new hair styling business[16](index=16&type=chunk) [Other Expenses](index=9&type=section&id=Other%20Expenses) Other expenses decreased by 55.9% to HK$0.2 million, primarily due to a reduction in donations Other Expenses (HK$ Million) | Indicator | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :----------- | :------ | :------ | :--------------- | | Other Expenses | 0.2 | 0.4 | -55.9 | - The decrease was mainly due to a reduction in donations made during the period[17](index=17&type=chunk) [Finance Costs](index=9&type=section&id=Finance%20Costs) Finance costs significantly increased by 27.6% to HK$21.5 million, primarily due to the sustained high interest rate environment Finance Costs (HK$ Million) | Indicator | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :----------- | :------ | :------ | :--------------- | | Finance Costs | 21.5 | 16.9 | 27.6 | - The increase was mainly due to sustained high interest rates[18](index=18&type=chunk) [Taxation](index=9&type=section&id=Taxation) Income tax expense surged by 581.2% to HK$4.3 million, primarily due to the expiry of the income tax holiday in Bangladesh Income Tax Expense (HK$ Million) | Indicator | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :--------------- | :------ | :------ | :--------------- | | Income Tax Expense | 4.3 | 0.6 | 581.2 | - The increase was mainly due to the expiry of the income tax holiday in Bangladesh[19](index=19&type=chunk) [Profit for the Period](index=9&type=section&id=Profit%20for%20the%20Period) Profit for the period decreased by 19.6% to HK$23.9 million, impacted by higher finance costs, new business start-up expenses, and increased tax expenses Profit for the Period (HK$ Million) | Indicator | H1 2024 | H1 2023 | Y-o-Y Change (%) | | :--------------- | :------ | :------ | :--------------- | | Profit for the Period | 23.9 | 29.7 | -19.6 | - The decrease in profit for the period was mainly due to increased finance costs from sustained high interest rates, higher start-up and ongoing expenses for the new hair styling business, and increased income tax and deferred tax expenses due to the expiry of the income tax holiday in Bangladesh[20](index=20&type=chunk) [Liquidity and Financial Resources](index=9&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's cash and bank balances increased by 6.2% to HK$195.6 million as of June 30, 2024, primarily due to increased trade receivables collection and proceeds from subsidiary disposal Liquidity Indicators (HK$ Million) | Indicator | June 30, 2024 | December 31, 2023 | Change (%) | | :-------------------------------------- | :------------ | :---------------- | :--------- | | Total Bank Balances, Pledged Bank Deposits and Cash | 195.6 | 184.2 | 6.2 | | Trade and Other Receivables | 271.9 | 274.3 | -0.8 | - The increase in cash and bank balances was mainly attributable to increased collection of trade receivables and proceeds from the disposal of a subsidiary during the period[21](index=21&type=chunk) [Borrowings and Gearing Ratio](index=10&type=section&id=Borrowings%20and%20Gearing%20Ratio) As of June 30, 2024, the Group had bank facilities of HK$840.1 million, with HK$182.3 million unused, and its gearing ratio increased to 74.4% from 72.8% at the end of 2023 Borrowings and Gearing Ratio | Indicator | June 30, 2024 (HK$ Million) | December 31, 2023 (HK$ Million) | | :------------------ | :-------------------------- | :------------------------------ | | Bank Facilities | 840.1 | N/A | | Unused Facilities | 182.3 | N/A | | Gearing Ratio | 74.4% | 72.8% | - The Group believes it has sufficient financial resources to meet its commitments and working capital requirements[22](index=22&type=chunk) [Capital Expenditure and Capital Commitments](index=10&type=section&id=Capital%20Expenditure%20and%20Capital%20Commitments) Capital expenditure for the period was approximately HK$13.3 million for property, plant, and equipment, primarily to maintain manufacturing capacity in Bangladesh, with capital commitments of HK$1.0 million as of June 30, 2024 Capital Expenditure and Commitments (HK$ Million) | Indicator | H1 2024 | H1 2023 | | :---------------------------------- | :------ | :------ | | Expenditure on Acquisition of Fixed Assets | 13.3 | 13.9 | | Capital Commitments | 1.0 | 0.6 | - Capital expenditure was primarily for maintaining its manufacturing capacity in Bangladesh[23](index=23&type=chunk) [Foreign Exchange Risk](index=10&type=section&id=Foreign%20Exchange%20Risk) The Group faces foreign currency risk from transactions denominated in USD, RMB, and BDT, but considers the risk minimal due to the HKD-USD peg and increased overall USD usage from Bangladesh factory output - The Group's trading items are denominated in foreign currencies (such as **USD and RMB**), operating expenses are denominated in **RMB and Bangladeshi Taka**, and the vast majority of sales are settled in **USD**[24](index=24&type=chunk) - Due to the pegging of the Hong Kong Dollar to the US Dollar, the Group's exposure to currency risk is considered extremely low[24](index=24&type=chunk) - During the period, revenue from the Bangladesh factory increased to **98.9%**, leading to an overall increase in USD usage[24](index=24&type=chunk) [Contingent Liabilities](index=10&type=section&id=Contingent%20Liabilities) As of June 30, 2024, the Group had no significant contingent liabilities - As of June 30, 2024, the Group had no significant contingent liabilities[25](index=25&type=chunk) [Pledge of Assets](index=11&type=section&id=Pledge%20of%20Assets) The Group's bank borrowings are secured by pledged bank deposits, land and buildings in Hong Kong, land and buildings in China, negative pledges on subsidiary assets in China and Bangladesh, and certain life insurance contracts - Bank borrowings are secured by pledged bank deposits of approximately **HK$85.2 million**[26](index=26&type=chunk) - Land and buildings and car parking spaces in Hong Kong of approximately **HK$85.7 million**, and land and buildings of approximately **HK$26.0 million** serve as collateral[26](index=26&type=chunk) - Negative pledges over assets of certain subsidiaries in China and Bangladesh, and certain life insurance contracts also serve as collateral[26](index=26&type=chunk) [Employees and Remuneration Policy](index=11&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2024, the Group employed 23,851 employees, with total employee expenses of HK$182.1 million, and provides retirement plans including MPF in Hong Kong and a self-managed provident fund in Bangladesh Employee and Remuneration Data | Indicator | June 30, 2024 | June 30, 2023 | | :-------------------- | :------------ | :------------ | | Total Number of Employees | 23,851 | 24,454 | | Total Employee Expenses | HK$182.1 Million | HK$151.9 Million | - The Group operates a defined contribution retirement scheme for all eligible employees in accordance with Hong Kong legislation[28](index=28&type=chunk) - Employees in Bangladesh are covered by the Group's self-administered provident fund[28](index=28&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals, and Future Plans for Material Investments or Capital Assets](index=12&type=section&id=Significant%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%2C%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The Group held no significant investments, conducted no material acquisitions or disposals, and had no authorized plans for future material investments or capital asset additions during the period - During the period, the Group did not hold any significant investments or undertake any material acquisitions or disposals[29](index=29&type=chunk) - As of June 30, 2024, the Board had not authorized any plans for material investments or additions to capital assets[29](index=29&type=chunk) [Interim Dividend](index=12&type=section&id=Interim%20Dividend) The Board declared an interim dividend of 3.0 HK cents per share, totaling approximately HK$19.7 million, representing a payout ratio of 83.6%, payable on September 20, 2024 Interim Dividend Information | Indicator | H1 2024 | H1 2023 | | :--------------- | :----------- | :------ | | Dividend Per Share | 3.0 HK cents | 4.2 HK cents | | Total Dividend Amount | HK$19.7 Million | N/A | | Payout Ratio | 83.6% | 97.0% | - The interim dividend will be paid on Friday, September 20, 2024, to shareholders whose names appear on the register of members of the Company on Friday, September 13, 2024[30](index=30&type=chunk) [Closure of Register of Members](index=12&type=section&id=Closure%20of%20Register%20of%20Members) The company's share register will be closed from September 11 to September 13, 2024, to determine eligible shareholders for the interim dividend - The register of members will be closed from Wednesday, September 11, 2024, to Friday, September 13, 2024[31](index=31&type=chunk) - All transfer forms, accompanied by the relevant share certificates, must be lodged with Tricor Investor Services Limited by 4:30 p.m. on Tuesday, September 10, 2024, for registration[31](index=31&type=chunk) [Corporate Governance and Other Information](index=13&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's adherence to corporate governance principles, directors' interests, and other relevant statutory disclosures [Compliance with the Corporate Governance Code](index=13&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company has adopted the Corporate Governance Code, complying with all code provisions except for the combined roles of Chairman and CEO, which the Board believes ensures consistent leadership and efficient strategic planning - The Company has complied with all code provisions in the Corporate Governance Code, except for code provision C.2.1 which stipulates that the roles of chairman and chief executive officer should be separate and should not be performed by the same individual[32](index=32&type=chunk) - Executive Director Mr. Cheung Yau Chong currently holds both the Chairman and Chief Executive Officer positions, an arrangement the Board believes benefits the Group through consistent leadership and more efficient and effective overall strategic planning[32](index=32&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=13&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules as its own code of conduct regarding securities transactions by Directors[33](index=33&type=chunk) - All Directors confirmed that they have complied with the required standards set out in the Model Code during the period[33](index=33&type=chunk) [Directors' and Chief Executive's Interests in Shares and Underlying Shares of the Company and its Associated Corporations](index=14&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2024, several directors and the chief executive held share interests in the company and its associated corporations, with Mr. Cheung Yau Chong holding a significant stake through a trust and beneficial ownership Directors' and Chief Executive's Long Positions in the Company's Shares (as of June 30, 2024) | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Issued Share Capital | | :------------------------------- | :----------------------------------- | :--------------- | :----------------------------------- | | Mr. Cheung Yau Chong | Beneficiary of a trust/Settlor of a discretionary trust | 343,369,803 | 52.37% | | | Beneficial owner | 12,790,000 | 1.95% | | Mr. Chan Kwok Keung | Beneficial owner | 1,000,000 | 0.15% | | Ms. Jia Ziying | Beneficial owner | 394,000 | 0.06% | | | Interest of spouse | 100,000 | 0.02% | | Mr. Li Yanbo | Beneficial owner | 100,000 | 0.02% | | | Interest of spouse | 394,000 | 0.06% | - Mr. Cheung Yau Chong indirectly controls a majority of the Company's shares through a trust structure and directly beneficially owns a portion of the shares[35](index=35&type=chunk)[36](index=36&type=chunk)[41](index=41&type=chunk) - Mr. Cheung Yau Chong also holds **100% or majority interests** in several associated corporations, including Evergreen Holdings, Golden Evergreen, and CLC Investment[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Substantial Shareholders' Interests in Shares and Underlying Shares of the Company](index=18&type=section&id=Substantial%20Shareholders%27%20Interests%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2024, Evergreen Holdings and its associated companies collectively held 52.37% of the company's issued share capital, with other major shareholders including Precision Global Capital Management LLC and SEAVI Advent Investments Ltd Substantial Shareholders' Interests in the Company's Shares (as of June 30, 2024) | Name of Shareholder | Capacity/Nature of Interest | Number of Shares (Long Position) | Approximate Percentage of the Company's Issued Share Capital | | :---------------------------------------- | :-------------------------- | :------------------------------- | :------------------------------------------- | | Evergreen Holdings | Beneficial owner | 343,369,803 | 52.37% | | Golden Evergreen | Interest in controlled corporation | 343,369,803 | 52.37% | | FC Investment | Interest in controlled corporation | 343,369,803 | 52.37% | | FC Management | Interest in controlled corporation | 343,369,803 | 52.37% | | CLC Investment | Interest in controlled corporation | 343,369,803 | 52.37% | | CLC Management | Interest in controlled corporation | 343,369,803 | 52.37% | | HSBC International Trustee Limited | Trustee | 343,369,803 | 52.37% | | Ms. Wong Ho Yan | Interest of spouse | 356,159,803 | 54.32% | | SEAVI Advent Investments Ltd. | Beneficial owner | 46,132,196 | 7.04% | | SEAVI Advent Equity V (A) Ltd | Interest in controlled corporation | 46,132,196 | 7.04% | | Precision Global Capital Management LLC | Beneficial owner | 56,464,000 | 8.61% | - Ms. Wong Ho Yan, as the spouse of Mr. Cheung Yau Chong, is deemed to be interested in the shares in which Mr. Cheung Yau Chong is interested[43](index=43&type=chunk) [Share Option Scheme](index=20&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme in 2017 to provide ownership opportunities to employees and directors, with no options granted or agreed to be granted as of June 30, 2024 - The Share Option Scheme aims to provide an opportunity for any director and full-time employee of any member of the Group who has contributed or will contribute to the Group to acquire ownership interests in the Company[44](index=44&type=chunk) - As of June 30, 2024, no share options had been granted or agreed to be granted under the Share Option Scheme[44](index=44&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[45](index=45&type=chunk) [Changes in Directors' Information](index=21&type=section&id=Changes%20in%20Directors%27%20Information) No changes in directors' information requiring disclosure under Listing Rule 13.51B(1) have occurred since the publication of the company's 2023 annual report - There have been no changes in directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules since the publication of the Company's annual report for the year ended December 31, 2023[46](index=46&type=chunk) [Review of Interim Results by Audit Committee](index=21&type=section&id=Review%20of%20Interim%20Results%20by%20Audit%20Committee) The Audit Committee, in conjunction with the Board and Deloitte Touche Tohmatsu, reviewed the Group's unaudited condensed consolidated financial statements for the period, confirming their preparation in accordance with applicable accounting standards and fair presentation - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period[47](index=47&type=chunk) - The Audit Committee is satisfied that the Group's unaudited condensed consolidated financial statements have been prepared in accordance with applicable accounting standards and fairly present the Group's financial position and performance for the period[47](index=47&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=21&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) This section presents the independent auditor's review report on the company's condensed consolidated financial statements for the six months ended June 30, 2024 [Introduction](index=21&type=section&id=Introduction) Deloitte Touche Tohmatsu reviewed Evergreen Products Group Limited's condensed consolidated financial statements for the six months ended June 30, 2024, prepared under Listing Rules and HKAS 34 - Deloitte Touche Tohmatsu has reviewed the Company's unaudited condensed consolidated financial statements for the six months ended June 30, 2024[47](index=47&type=chunk) - The condensed consolidated financial statements have been prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[47](index=47&type=chunk) [Scope of Review](index=22&type=section&id=Scope%20of%20Review) The review was conducted in accordance with HKSRE 2410, involving inquiries and analytical procedures, and is less extensive than an audit, thus no audit opinion is expressed - The review was conducted 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 Hong Kong Institute of Certified Public Accountants[48](index=48&type=chunk) - A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to express an audit opinion[48](index=48&type=chunk) [Conclusion](index=22&type=section&id=Conclusion) Based on the review, the auditor found no matters suggesting that the condensed consolidated financial statements were not prepared in all material respects in accordance with HKAS 34 - Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[49](index=49&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the Group's financial performance, including profit or loss and other comprehensive income, for the six months ended June 30, 2024 [Profit or Loss for the Period](index=22&type=section&id=Profit%20or%20Loss%20for%20the%20Period) For the six months ended June 30, 2024, the Group's revenue increased by 9.6% to HK$525.2 million, but profit for the period decreased by 19.6% to HK$23.9 million due to higher costs and taxes Condensed Consolidated Statement of Profit or Loss Summary (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :---------------- | :------------ | :------------ | | Revenue | 525,178 | 479,193 | | Cost of sales | (407,551) | (369,190) | | Gross profit | 117,627 | 110,003 | | Finance costs | (21,528) | (16,870) | | Income tax expense | (4,346) | (638) | | Profit for the period | 23,882 | 29,701 | [Other Comprehensive Income (Expense)](index=23&type=section&id=Other%20Comprehensive%20Income%20(Expense)) Total other comprehensive expense for the period was HK$24.1 million, mainly comprising a property revaluation deficit and exchange differences from translating foreign operations Other Comprehensive Income (Expense) Summary (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :------------------------------------------ | :------------ | :------------ | | Deficit on revaluation of properties | (2,731) | – | | Exchange differences arising from translating foreign operations | (21,347) | (13,806) | | Other comprehensive expense for the period, net of income tax | (24,078) | (12,534) | | Total comprehensive (expense) income for the period | (196) | 17,167 | [Earnings Per Share](index=24&type=section&id=Earnings%20Per%20Share) Basic earnings per share attributable to owners of the company decreased to HK$0.04 from HK$0.05, with diluted earnings per share not applicable due to no potential ordinary shares Earnings Per Share (HK$) | Indicator | June 30, 2024 | June 30, 2023 | | :---------- | :------------ | :------------ | | Basic EPS | 0.04 | 0.05 | | Diluted EPS | Not applicable | Not applicable | [Condensed Consolidated Statement of Financial Position](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position, detailing its assets, liabilities, and equity, as of June 30, 2024 [Assets](index=24&type=section&id=Assets) As of June 30, 2024, total non-current assets were HK$622.8 million and total current assets were HK$971.9 million, with inventory and trade and other receivables being the main current assets Assets Summary (HK$ Thousand) | Indicator | June 30, 2024 | December 31, 2023 | | :------------------------ | :------------ | :---------------- | | Total non-current assets | 622,807 | 646,996 | | Property, plant and equipment | 546,467 | 580,600 | | Total current assets | 971,931 | 984,570 | | Inventories | 496,276 | 521,359 | | Trade and other receivables | 271,934 | 274,262 | | Cash and cash equivalents | 103,974 | 90,583 | [Liabilities and Equity](index=25&type=section&id=Liabilities%20and%20Equity) As of June 30, 2024, total current liabilities were HK$719.1 million and total non-current liabilities were HK$49.7 million, with secured bank and other borrowings being the primary liabilities Liabilities and Equity Summary (HK$ Thousand) | Indicator | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :------------ | :---------------- | | Total current liabilities | 719,118 | 734,054 | | Secured bank and other borrowings | 572,372 | 568,563 | | Total non-current liabilities | 49,730 | 52,412 | | Equity attributable to owners of the Company | 833,670 | 851,626 | | Total equity | 825,890 | 845,100 | [Condensed Consolidated Statement of Changes in Equity](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement outlines the changes in the Group's equity attributable to owners of the company for the six months ended June 30, 2024 [Overview of Equity Changes](index=26&type=section&id=Overview%20of%20Equity%20Changes) Equity attributable to owners of the company decreased from HK$851.6 million to HK$833.7 million, primarily due to profit for the period, property revaluation deficit, exchange differences, and dividends paid Summary of Changes in Equity (HK$ Thousand) | Indicator | January 1, 2024 (Audited) | June 30, 2024 (Unaudited) | | :------------------------------------------ | :------------------------ | :------------------------ | | Equity attributable to owners of the Company | 851,626 | 833,670 | | Profit for the period | N/A | 24,882 | | Deficit on revaluation of properties | N/A | (2,731) | | Exchange differences on translation of foreign operations | N/A | (21,093) | | Dividends recognised as distribution | N/A | (19,014) | - Total comprehensive income (expense) for the period was **HK$1,058 thousand**, with total comprehensive expense attributable to non-controlling interests being **HK$1,254 thousand**[53](index=53&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement provides an overview of the Group's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2024 [Overview of Cash Flows](index=27&type=section&id=Overview%20of%20Cash%20Flows) Net cash from operating activities was HK$212.8 million, net cash used in investing activities was HK$20.1 million, and net cash used in financing activities was HK$188.8 million, resulting in cash and cash equivalents of HK$104.0 million at period-end Condensed Consolidated Statement of Cash Flows Summary (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :-------------------------------- | :------------ | :------------ | | Net cash from operating activities | 212,752 | 177,312 | | Net cash used in investing activities | (20,134) | (19,014) | | Net cash used in financing activities | (188,839) | (134,907) | | Net increase in cash and cash equivalents | 3,779 | 23,391 | | Cash and cash equivalents at end of period | 103,974 | 99,267 | [Notes to the Condensed Consolidated Financial Statements](index=28&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes supporting the condensed consolidated financial statements, covering accounting policies, segment information, and financial instrument disclosures [1. Basis of Preparation](index=29&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in HKD under HKAS 34 and Appendix 16 of the Listing Rules, with the company's functional currency being USD - The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[58](index=58&type=chunk) - The condensed consolidated financial statements are presented in Hong Kong Dollars, and the Company's functional currency is US Dollars[58](index=58&type=chunk) [2. Principal Accounting Policies](index=29&type=section&id=2.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, applying revised HKFRSs, with the application of HKAS 7 and HKFRS 7 (Amendments) on supplier finance arrangements expected to impact disclosures on liabilities, cash flows, and liquidity risk - The condensed consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments and properties that are measured at fair values or revalued amounts, as appropriate[59](index=59&type=chunk) - During the current interim period, the Group has applied, for the first time, the revised Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA[60](index=60&type=chunk) - The application of HKAS 7 and HKFRS 7 (Amendments) Supplier Finance Arrangements is expected to impact the disclosures in the annual consolidated financial statements regarding the Group's liabilities, cash flows, and liquidity risk related to supplier finance arrangements entered into by the Group[61](index=61&type=chunk) [3. Revenue and Segment Information](index=31&type=section&id=3.%20Revenue%20and%20Segment%20Information) The Group's revenue, primarily from wigs, hair accessories, and high-end human hair extension products, totaled HK$525.2 million as of June 30, 2024, with the US market being the largest contributor, and all revenue recognized upon transfer of goods control The Group's Revenue by Product (HK$ Thousand) | Product Category | June 30, 2024 | June 30, 2023 | | :------------------------------ | :------------ | :------------ | | Wigs, hair accessories and others | 441,842 | 394,009 | | High-end human hair extension products | 65,100 | 54,200 | | Halloween products | 18,236 | 30,984 | | **Total revenue** | **525,178** | **479,193** | The Group's Revenue by Geographical Location of Delivery to Customers (HK$ Thousand) | Location | June 30, 2024 | June 30, 2023 | | :-------------------------- | :------------ | :------------ | | United States of America | 483,924 | 429,571 | | Germany | 15,215 | 22,008 | | United Kingdom | 11,046 | 10,146 | | Japan | 3,342 | 7,544 | | The People's Republic of China | 5,368 | 6,480 | | Others | 6,283 | 3,444 | | **Total revenue** | **525,178** | **479,193** | - All revenue is recognized when control over the goods has been transferred, which is when the goods are delivered to the customers at their specified locations[65](index=65&type=chunk) [4. Other Gains and Losses](index=32&type=section&id=4.%20Other%20Gains%20and%20Losses) Net other gains and losses for the period amounted to HK$2.9 million, primarily from net foreign exchange gains, partially offset by net losses on financial assets measured at fair value through profit or loss Other Gains and Losses (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :------------------------------------------ | :------------ | :------------ | | Net loss on financial assets measured at fair value through profit or loss | (230) | (206) | | Net foreign exchange gain | 3,152 | 2,817 | | **Total** | **2,922** | **2,611** | [5. Impairment Assessment of Trade Receivables under Expected Credit Loss Model](index=32&type=section&id=5.%20Impairment%20Assessment%20of%20Trade%20Receivables%20under%20Expected%20Credit%20Loss%20Model) Impairment losses on trade receivables for the period were HK$7 thousand, consistent with the prior year, with assessment inputs and assumptions remaining unchanged Impairment Losses on Trade Receivables (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :------------ | :------------ | :------------ | | Impairment losses | 7 | 4 | - The basis of the inputs and assumptions used in determining the impairment assessment and the valuation techniques are the same as those applied in the Group's annual financial statements for the year ended December 31, 2023[67](index=67&type=chunk) [6. Other Expenses](index=32&type=section&id=6.%20Other%20Expenses) Other expenses for the period decreased to HK$164 thousand from HK$372 thousand, primarily due to reduced donation expenses Other Expenses (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :------------- | :------------ | :------------ | | Donation expenses | 164 | 372 | [7. Finance Costs](index=33&type=section&id=7.%20Finance%20Costs) Total finance costs for the period increased by 27.6% to HK$21.5 million, mainly driven by higher interest on bank borrowings Finance Costs (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :-------------------------------- | :------------ | :------------ | | Interest on bank borrowings | 19,899 | 15,847 | | Interest on lease liabilities | 336 | 324 | | Interest on other borrowings | 494 | 516 | | Interest on amounts due to an associated company | 73 | 183 | | Others | 726 | – | | **Total** | **21,528** | **16,870** | [8. Income Tax Expense](index=33&type=section&id=8.%20Income%20Tax%20Expense) Income tax expense for the period significantly increased to HK$4.3 million, primarily due to the expiry of the income tax holiday in Bangladesh and under-provision in prior years Income Tax Expense (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :------------------------------------------ | :------------ | :------------ | | Current tax: Bangladesh | 916 | 552 | | Current tax: Other jurisdictions | 81 | 70 | | Under-provision in prior years: Other jurisdictions | 997 | 76 | | Deferred tax: Current period | 1,596 | (60) | | **Total** | **4,346** | **638** | - The increase in income tax expense was mainly due to the expiry of the income tax holiday in Bangladesh[19](index=19&type=chunk)[70](index=70&type=chunk) [9. Profit for the Period](index=34&type=section&id=9.%20Profit%20for%20the%20Period) Profit for the period was stated after deducting depreciation of property, plant, and equipment of HK$19.4 million, and including interest income of HK$1.4 million and government grants of HK$0.2 million Profit for the Period Adjustments (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :---------------------------------- | :------------ | :------------ | | Depreciation of property, plant and equipment | 19,443 | 24,184 | | Interest income | (1,383) | (929) | | Government grants | (205) | – | - Government grants refer to grants under the Technology Voucher Programme under the Innovation and Technology Fund provided by the Hong Kong Government[71](index=71&type=chunk) [10. Dividends](index=34&type=section&id=10.%20Dividends) A final dividend of HK$0.029 per share, totaling approximately HK$19.0 million, was paid for the year ended December 31, 2023, and an interim dividend of HK$0.03 per share, totaling HK$19.7 million, was declared after the period-end Dividend Distribution (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :---------------------- | :------------ | :------------ | | Total final dividend paid | 19,014 | 25,385 | | Total interim dividend declared | 19,670 | N/A | - The interim dividend of **HK$0.03 per share** will be paid to the owners of the Company whose names appear on the register of members of the Company on September 13, 2024[72](index=72&type=chunk) [11. Earnings Per Share](index=35&type=section&id=11.%20Earnings%20Per%20Share) Basic earnings per share attributable to owners of the company was HK$0.04, based on a weighted average of 655,652 thousand ordinary shares, with diluted earnings per share not applicable Earnings Per Share Calculation Data | Indicator | June 30, 2024 (HK$ Thousand/Thousand Shares) | June 30, 2023 (HK$ Thousand/Thousand Shares) | | :------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Profit attributable to owners of the Company | 24,882 | 31,621 | | Weighted average number of ordinary shares | 655,652 | 686,082 | | Basic earnings per share (HK$) | 0.04 | 0.05 | | Diluted earnings per share | Not applicable | Not applicable | [12. Property, Plant and Equipment and Investment Properties](index=35&type=section&id=12.%20Property%2C%20Plant%20and%20Equipment%20and%20Investment%20Properties) The Group acquired HK$13.3 million in property, plant, and equipment, recognized a revaluation deficit of HK$2.7 million on industrial buildings, and recognized new right-of-use assets and lease liabilities of HK$216 thousand from new and renewed lease agreements Property, Plant and Equipment Related Data (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :---------------------------------- | :------------ | :------------ | | Acquisition of property, plant and equipment | 13,260 | 13,853 | | Deficit on revaluation of properties | 2,731 | – | | New right-of-use assets | 216 | 1,624 | | New lease liabilities | 216 | 1,624 | [13. Inventories](index=36&type=section&id=13.%20Inventories) Total inventories decreased to HK$496.3 million as of June 30, 2024, from HK$521.4 million at the end of 2023, primarily due to reductions in raw materials and work-in-progress Inventory Composition (HK$ Thousand) | Inventory Category | June 30, 2024 | December 31, 2023 | | :----------------- | :------------ | :---------------- | | Raw materials | 322,907 | 352,177 | | Work-in-progress | 81,217 | 98,470 | | Finished goods | 92,152 | 70,712 | | **Total** | **496,276** | **521,359** | [14. Trade and Other Receivables](index=36&type=section&id=14.%20Trade%20and%20Other%20Receivables) Total trade and other receivables amounted to HK$289.6 million as of June 30, 2024, with trade receivables at HK$226.8 million, and the Group typically grants an average credit period of 90 days to trade customers Trade and Other Receivables (HK$ Thousand) | Indicator | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :------------ | :---------------- | | Trade receivables, net | 226,779 | 214,926 | | Other receivables | 19,201 | 21,840 | | Deposits for acquisition of a subsidiary | 10,000 | – | | **Total** | **289,555** | **281,815** | Ageing Analysis of Trade Receivables (HK$ Thousand) | Ageing | June 30, 2024 | December 31, 2023 | | :----------- | :------------ | :---------------- | | 0 to 60 days | 159,614 | 150,053 | | 61 to 90 days | 43,427 | 46,294 | | 91 to 120 days | 10,792 | 10,888 | | Over 120 days | 12,946 | 7,691 | | **Total** | **226,779** | **214,926** | - The Group grants an average credit period of **90 days** to its trade customers[78](index=78&type=chunk) [15. Pledged Bank Deposits](index=37&type=section&id=15.%20Pledged%20Bank%20Deposits) Pledged bank deposits, classified as current assets, serve as collateral for bank and other borrowings and will be released upon repayment of the related borrowings - Pledged bank deposits refer to deposits pledged to banks and financial institutions as security for bank and other borrowings, and are therefore classified as current assets[79](index=79&type=chunk) - The pledged bank deposits will be released upon repayment of the relevant bank and other borrowings[79](index=79&type=chunk) [16. Trade and Other Payables](index=38&type=section&id=16.%20Trade%20and%20Other%20Payables) Trade payables decreased to HK$56.9 million as of June 30, 2024, from HK$73.7 million at the end of 2023, with accrued staff costs at HK$32.2 million, and management is negotiating out-of-court settlements for certain trade payables under legal dispute Trade and Other Payables (HK$ Thousand) | Indicator | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :------------ | :---------------- | | Trade payables | 56,933 | 73,729 | | Accrued staff costs | 32,229 | 32,671 | | Accruals and other payables | 13,151 | 7,837 | Ageing Analysis of Trade Payables (HK$ Thousand) | Ageing | June 30, 2024 | December 31, 2023 | | :------------- | :------------ | :---------------- | | 0 to 60 days | 26,195 | 39,934 | | 61 to 120 days | 40 | 2 | | Over 120 days | 30,698 | 33,793 | | **Total** | **56,933** | **73,729** | - During the year ended December 31, 2023, certain suppliers initiated legal proceedings against the Company's wholly-owned subsidiary in China for settlement of trade payables, and management is negotiating with the relevant suppliers for out-of-court settlements[81](index=81&type=chunk) [17. Secured Bank and Other Borrowings/Bank Overdrafts](index=39&type=section&id=17.%20Secured%20Bank%20and%20Other%20Borrowings%2FBank%20Overdrafts) Total secured bank and other borrowings amounted to HK$604.3 million as of June 30, 2024, with an average effective annual interest rate ranging from 3.25% to 8.85% for floating-rate bank borrowings, and the Group complied with all loan covenants Secured Bank and Other Borrowings (HK$ Thousand) | Indicator | June 30, 2024 | December 31, 2023 | | :------------------------------------------ | :------------ | :---------------- | | Bank overdrafts | 665 | – | | Bank borrowings | 502,937 | 454,243 | | Bank borrowings under supplier finance arrangements | 89,467 | 130,034 | | Other borrowings | 11,242 | 19,458 | | **Total** | **604,311** | **603,735** | - The average effective annual interest rate for the Group's bank borrowings under floating rate arrangements ranged from **3.25% to 8.85%**[82](index=82&type=chunk) - Bank facilities are secured by pledged bank deposits, land and buildings, negative pledges over assets of subsidiaries, and certain life insurance contracts[83](index=83&type=chunk) - The Group has complied with the financial covenants at the end of the reporting period[85](index=85&type=chunk) [18. Share Capital of the Company](index=40&type=section&id=18.%20Share%20Capital%20of%20the%20Company) As of June 30, 2024, the company's authorized share capital was 1,000,000,000 shares, par value US$0.01, with 655,652,000 issued and fully paid shares amounting to HK$51.01 million Share Capital Information | Indicator | Number of Shares (Thousand Shares) | Amount (HK$ Thousand) | | :------------------------ | :--------------------------------- | :-------------------- | | Authorised share capital | 1,000,000 | 10,000 (US$ Thousand) | | Issued and fully paid share capital | 655,652 | 51,010 | [19. Share-based Payment Transactions](index=40&type=section&id=19.%20Share-based%20Payment%20Transactions) The Group adopted a share option scheme in 2017 to incentivize employees, but no share options have been granted as of the publication date of these condensed consolidated financial statements - The Share Option Scheme aims to provide an opportunity for any director and full-time employee of any member of the Group who has contributed or will contribute to the Group to acquire ownership interests in the Company[86](index=86&type=chunk) - As of the date of publication of these condensed consolidated financial statements, no share options have been granted by the Group[86](index=86&type=chunk) [20. Fair Value Measurement of Financial Instruments](index=41&type=section&id=20.%20Fair%20Value%20Measurement%20of%20Financial%20Instruments) The Group's financial assets measured at fair value, primarily investment funds and life insurance contracts, are classified as Level 3, with no transfers between Level 1 and Level 2 during the period Financial Assets Measured at Fair Value on a Recurring Basis (HK$ Thousand) | Financial Asset Category | June 30, 2024 | December 31, 2023 | Fair Value Hierarchy | Valuation Techniques and Key Inputs | | :----------------------- | :------------ | :---------------- | :------------------- | :---------------------------------- | | Investment funds | 1,334 | 2,010 | Level 3 | Based on the net asset value of the investment funds | | Life insurance contracts | 42,803 | 41,790 | Level 3 | Account value as reported by the insurance company | - The directors of the Company consider the account value (i.e. surrender value) as reported by the insurance company to be an appropriate estimate of fair value[88](index=88&type=chunk) - There were no transfers between Level 1 and Level 2 during the reporting period[89](index=89&type=chunk) [21. Major Non-cash Transactions](index=44&type=section&id=21.%20Major%20Non-cash%20Transactions) Bank borrowings under supply chain finance arrangements, amounting to approximately HK$129.9 million, represent payments made directly by banks to suppliers during the six months ended June 30, 2024 Bank Borrowings under Supply Chain Finance Arrangements (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :------------------------------------------ | :------------ | :------------ | | Bank borrowings under supply chain finance arrangements | 129,913 | 88,667 | [22. Related Party Transactions](index=45&type=section&id=22.%20Related%20Party%20Transactions) The Group engaged in computer products and services transactions with a related party totaling HK$540 thousand, and remuneration for directors and other key management personnel amounted to HK$2.9 million during the period Related Party Transactions and Key Management Personnel Remuneration (HK$ Thousand) | Indicator | June 30, 2024 | June 30, 2023 | | :-------------------------------- | :------------ | :------------ | | Computer products and services expenses | 540 | 540 | | Key management personnel remuneration | 2,938 | 2,808 | - The transactions for computer products and services expenses were entered into with Sunshine Software Limited, which is controlled by Mr. Cheung Yau Chong[92](index=92&type=chunk) - The remuneration of directors and other key management personnel is determined based on individual performance and market trends[93](index=93&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 525.2 million, an increase of 9.6% compared to HKD 479.2 million for the same period in 2023[1] - Gross profit for the same period was HKD 117.6 million, up 6.9% from HKD 110.0 million in 2023[1] - Net profit decreased by 19.6% to HKD 23.9 million from HKD 29.7 million in 2023, primarily due to increased financing costs from high interest rates and rising operational expenses[1] - The gross profit margin slightly decreased to 22.4%, down from 23.8% in the same period of 2023, primarily due to the impact of new minimum wage regulations in Bangladesh[26] - The net profit margin decreased to 4.5% from 6.2% in the same period of 2023, mainly due to increased financing costs and tax expenses[26] - The company's profit attributable to shareholders for the six months ended June 30, 2024, was HKD 24,882,000, compared to HKD 31,621,000 for the same period in 2023, representing a decrease of approximately 21.5%[16] Dividends - The interim dividend declared is HKD 0.03 per share, down from HKD 0.042 per share in 2023[1] - The interim payout ratio for the period is 83.6%, compared to 97.0% in 2023[1] - The company declared a final dividend of HKD 0.029 per share for the year ended December 31, 2023, down from HKD 0.037 per share in 2022, totaling approximately HKD 19,014,000[15] - The company plans to distribute an interim dividend of HKD 0.030 per share, amounting to HKD 19,670,000, to shareholders listed on September 13, 2024[15] Assets and Liabilities - Total assets as of June 30, 2024, amounted to HKD 971.9 million, a slight decrease from HKD 984.6 million as of December 31, 2023[4] - Current assets were HKD 971.9 million, with inventories at HKD 496.3 million, down from HKD 521.4 million[4] - Current liabilities totaled HKD 719.1 million, compared to HKD 734.1 million at the end of 2023[4] - Total equity attributable to the owners of the company was HKD 833.7 million, down from HKD 851.6 million[5] - Cash and bank balances increased by 6.2% to HKD 195.6 million as of June 30, 2024, compared to HKD 184.2 million at the end of 2023[44] - The capital debt ratio increased to 74.4% as of June 30, 2024, up from 72.8% at the end of 2023, indicating a higher leverage position[45] Revenue Breakdown - Revenue from the United States was HKD 483,924,000, up 12.7% from HKD 429,571,000 in the previous year[12] - Revenue from high-end human hair extension products increased by 20.1% to HKD 65.1 million, driven by a recovery in consumer purchasing power[30] - Revenue from Halloween products decreased by 41.0% to HKD 18.3 million, primarily due to ongoing inventory destocking pressures from customers[31] - Revenue from the group's products manufactured in Bangladesh accounted for 98.9% of total revenue, compared to 98.6% in the same period of 2023[29] - The United States remained the group's primary market, contributing 92.1% of total revenue, up from 89.6% in the same period of 2023[29] Expenses - The group's cost of goods sold increased by 10.4% to HKD 407.6 million for the six months ended June 30, 2023, up from HKD 369.2 million in the same period last year[32] - Distribution and selling expenses rose by 15.3% to HKD 13.2 million, attributed to increased transportation and commission costs[38] - Administrative expenses increased by 1.0% to HKD 61.5 million, mainly due to higher salaries and employee benefits from the expansion of the new hairstyling business[39] - Financing costs increased by 27.6% to HKD 21.5 million, primarily due to persistently high interest rates[41] Other Financial Information - The company reported a basic earnings per share of HKD 0.04, compared to HKD 0.05 in the previous year[3] - The weighted average number of ordinary shares for calculating basic and diluted earnings per share was 655,652,000 shares for the six months ended June 30, 2024, down from 686,082,000 shares in 2023[16] - Other income rose by 40.7% to HKD 4.1 million, primarily due to increased bank interest and rental income[35] - The group recognized a revaluation loss of HKD 2,731,000 on industrial buildings, offices, and parking lots for the six months ended June 30, 2024, with no revaluation gains or losses recognized in the same period of 2023[17] - The group faced foreign currency risk due to transactions primarily in USD and CNY, with 98.9% of revenue from the Bangladesh factory in USD[47] Corporate Governance and Compliance - The company has adopted the Corporate Governance Code and believes that good governance standards are crucial for protecting shareholder interests and enhancing corporate value[57] - The Audit Committee has reviewed the unaudited condensed consolidated financial statements for the period, confirming they are prepared in accordance with applicable accounting standards[59] - The interim results announcement and report will be published on the Hong Kong Stock Exchange and the company's website, ensuring compliance with the Listing Rules[60]

Financial Performance - The group's revenue for the year was HKD 979.2 million, a decrease of 11.0% compared to HKD 1,100.4 million for the year ended December 31, 2022[12]. - The profit for the year was HKD 48.2 million, down 17.3% from HKD 58.3 million for the previous year[12]. - The gross profit margin improved during the year due to the depreciation of the taka against the HKD and improved product margin costs[11]. - The group's gross profit was HKD 233.2 million, down 9.3% from HKD 257.1 million, with a gross margin increase of 0.4 percentage points[26]. - The profit recorded was HKD 48.2 million, down 17.3% from the previous year, with a slight increase in gross margin to 23.8%[19]. - The revenue from hair extension products and lace wig products saw a slowdown due to weak consumer purchasing power[11]. - The sales of high-end human hair extension products dropped significantly by 56.4%, from HKD 184.5 million to HKD 80.4 million, due to weakened consumer purchasing power[23]. - The revenue from Halloween products decreased by 15.9%, from HKD 43.5 million to HKD 36.6 million, attributed to soft consumer purchasing power and conservative order placements[23]. - The cost of goods sold decreased by 11.5% to HKD 746.0 million, primarily due to streamlined production processes and reduced raw material costs[24]. - Other income increased by 33.9% to HKD 7.3 million, mainly due to higher warehouse rental and bank interest income[29]. - The group's net profit for the current year was HKD 48.2 million, a decrease of 17.3% from HKD 58.3 million for the year ended December 31, 2022, attributed to weak consumer purchasing power and a shift in product sales mix[37]. Dividend and Payout - The proposed final dividend is HKD 0.029 per share, totaling approximately HKD 19.0 million, with a total dividend of HKD 0.071 per share for the year[15]. - The dividend payout ratio for the year is approximately 99.2%, compared to 63.5% in 2022[15]. - The board will periodically review the dividend policy to ensure its effectiveness[154]. - The company plans to distribute at least 20% of its distributable net profit as dividends each fiscal year[153]. Operational Strategy - The company plans to open more online stores on several well-known cross-border e-commerce platforms to expand sales channels and customer base[13]. - The company aims to integrate production lines in its Bangladesh factory to achieve a balanced and diversified product portfolio[10]. - The company will continue to focus on inventory control and cost optimization measures to enhance financial performance[13]. - The company aims to improve its bank loan portfolio and optimize production costs to enhance profitability and liquidity in the near future[56]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years[82]. - A strategic acquisition of a local competitor is under consideration, which could potentially increase the company's customer base by 30%[82]. - The company aims to improve operational efficiency by implementing new technologies, expecting a cost reduction of approximately 5% in the next fiscal year[82]. Market and Sales Performance - The revenue from wigs, wig accessories, and others accounted for 88.1% of total revenue, up from 79.3% in the previous year[22]. - The revenue contribution from the Bangladesh factory rose to 98.7% of total revenue, compared to 97.9% in the previous year[22]. - The U.S. market remained the primary market, contributing 90.1% of total revenue, an increase from 87.6% in the previous year[22]. - Revenue from sales outside of China represented 98.7% of total revenue, with sales from the United States alone accounting for 90.1%[161]. Financial Position and Ratios - The asset-liability ratio increased from 61.9% as of December 31, 2022, to 72.8%[11]. - The capital debt ratio increased to 72.8% as of December 31, 2023, compared to 61.9% as of December 31, 2022, due to increased bank borrowings[39]. - Cash and bank balances increased by 8.0% from HKD 170.5 million as of December 31, 2022, to HKD 184.2 million as of December 31, 2023, mainly due to bank borrowings used to pay accounts payable[38]. - The total bank borrowings and overdrafts amounted to HKD 603.7 million, up from HKD 540.2 million in 2022, with HKD 568.6 million due within one year[165]. Governance and Compliance - The company is committed to maintaining compliance with the Securities and Futures Ordinance, ensuring transparency in its shareholdings and related interests[67]. - The board includes members with extensive backgrounds in finance and law, contributing to informed decision-making processes[75]. - The company has established a robust governance structure with various committees to oversee its operations and strategic initiatives[73]. - The board has established three committees: the audit committee, the remuneration committee, and the nomination committee to oversee specific aspects of the company's affairs[102]. - The audit committee has reviewed the company's corporate governance policies and compliance with the corporate governance code during the year[98]. - The company has established a policy for handling and disclosing inside information to ensure compliance with legal and regulatory requirements[129]. Risks and Challenges - The company faces significant risks related to labor supply and cost increases, which are critical for maintaining product quality[156]. - The company is exposed to intense competition from manufacturers in low-cost countries, which may adopt more aggressive pricing strategies[157]. - The group may face significant costs and operational challenges due to compliance with frequently changing regulations in emerging markets like Bangladesh[167]. - The majority of the group's borrowings are floating-rate loans, exposing it to interest rate risk, which the group plans to monitor closely[169]. Employee and Management - The group employed 25,371 employees in Bangladesh as of December 31, 2023, compared to 25,199 employees in the previous year, reflecting an increase of 0.68%[48]. - As of December 31, 2023, the total employee expenditure was HKD 308.7 million, down from HKD 385.6 million for the year ended December 31, 2022, indicating a decrease of approximately 20%[48]. - The total number of senior management personnel categorized by salary range includes 7 individuals earning between HKD 1 and 500,000, 2 individuals earning between HKD 500,001 and 1,500,000, and 1 individual earning between HKD 3,000,001 and 4,000,000[111]. Shareholder Information - As of December 31, 2023, the company’s major shareholder, Mr. Zhang Youchang, holds 343,369,803 shares, representing approximately 52.37% of the issued share capital[199]. - The company’s governance structure includes trusts established by Mr. Zhang Youchang, which hold substantial shares in multiple entities[200]. - The report indicates a strong alignment of interests between the management and shareholders due to significant shareholdings by key executives[199]. - The company has a diversified ownership structure with multiple trusts and affiliated entities under Mr. Zhang Youchang's control[200].

Financial Performance - The revenue for the year was HKD 979.2 million, a decrease of 11.0% compared to HKD 1,100.4 million for the year ended December 31, 2022[16]. - The net profit for the year was HKD 48.2 million, down from HKD 58.3 million for the year ended December 31, 2022[16]. - The basic earnings per share attributable to equity shareholders was approximately HKD 0.08, a decrease of about 20.0% from HKD 0.10 for the year ended December 31, 2022[16]. - The company's profit attributable to shareholders decreased to HKD 51,011,000 in 2023 from HKD 66,289,000 in 2022, a decline of 23%[70]. - The group's net profit for the year was HKD 48.2 million, down HKD 10.1 million or 17.3% from HKD 58.3 million for the year ended December 31, 2022, primarily due to weak consumer purchasing power and inventory destocking pressures[149]. Revenue Breakdown - Revenue from synthetic hair and related products was HKD 862,256,000, a slight decrease of 1.3% from HKD 872,398,000 in 2022[37]. - Revenue from high-end human hair extension products dropped significantly to HKD 80,423,000 from HKD 184,486,000, a decline of approximately 56.4%[37]. - Revenue from hair extensions, hair accessories, and others decreased by HKD 10.1 million to HKD 862.3 million, a decline of 1.2%, mainly due to a drop in sales of lace wigs and woven products, offset by an increase in sales of braids and specialty braids[143]. - Revenue from Halloween products decreased by 15.9% to 36.6 million HKD from 43.5 million HKD in the previous year, primarily due to weakened consumer purchasing power[118]. Cost and Expenses - The gross profit margin for the year was 23.8%, an increase of 0.4 percentage points from 23.4% for the year ended December 31, 2022[16]. - Administrative expenses decreased to HKD 119,091,000 from HKD 138,073,000, reflecting a reduction of about 13.8%[1]. - Financing costs increased to HKD 36,810,000 from HKD 29,826,000, marking an increase of approximately 23.4%[1]. - The group's cost of goods sold decreased by HKD 97.3 million to HKD 746.0 million, a reduction of 11.5%, mainly due to streamlined production processes and lower raw material costs[144]. Assets and Liabilities - The total assets less current liabilities amounted to HKD 897.5 million, compared to HKD 917.8 million in the previous year[20]. - The capital debt ratio as of December 31, 2023, was 72.8%, compared to 61.9% as of December 31, 2022[16]. - Trade payables as of 2023 were HKD 73,729,000, compared to HKD 35,380,000 in 2022, showing an increase of 108%[80]. - The company reported a total of HKD 131,629,000 in current liabilities for 2023, reflecting an increase from the previous year[80]. Dividends - The company proposed a final dividend of HKD 0.029 per share, along with an interim dividend of HKD 0.042 per share, totaling HKD 0.071 per share for the year[16]. - The board proposed a final dividend of HKD 0.029 per share for the year, down from HKD 0.037 per share in 2022[163]. Market Outlook and Strategy - The company anticipates a gradual stabilization in market demand for hair products by the end of this year[199]. - The company plans to expand its operations in Thailand, with a new lease agreement for office space amounting to HKD 2,835,000[73]. - The group plans to expand its sales team to explore new market opportunities and increase its presence on well-known cross-border e-commerce platforms[185]. - The company will continue to focus on its core business and closely monitor the latest developments in the industry[199]. Employee and Operational Metrics - The total employee costs for 2023 amounted to HKD 308,660,000, down from HKD 385,597,000 in 2022, indicating a decrease of 19.9%[89]. - The group employed 25,371 employees in Bangladesh as of December 31, 2023, compared to 25,199 employees as of December 31, 2022[155]. Other Income and Losses - The company's bank interest income for 2023 was HKD 2,082,000, significantly up from HKD 395,000 in 2022, representing a growth of 426%[60]. - Other income rose by HKD 1.8 million to HKD 7.3 million, an increase of 33.9%, mainly due to higher warehouse rental income and bank interest income[168]. - The net loss of financial assets measured at fair value through profit or loss was HKD (1,119) thousand in 2023, an improvement from HKD (4,807) thousand in 2022[43].

Revenue Performance - The group's revenue for the six months ended June 30, 2023, was HKD 479.2 million, a decrease of approximately 11.6% compared to HKD 542.1 million in the same period of 2022[9]. - Revenue from wigs, wig accessories, and others accounted for 82.2% of total revenue, up from 77.5% in the same period of 2022[12]. - High-end human hair extension products saw a revenue decline of 37.1%, from HKD 86.2 million to HKD 54.2 million, due to decreased consumer purchasing power[13]. - The revenue from Halloween products decreased by 12.9%, from HKD 35.6 million to HKD 31.0 million, attributed to more conservative customer orders[15]. - Revenue for the six months ended June 30, 2023, was HKD 479,193,000, a decrease of 11.6% compared to HKD 542,058,000 for the same period in 2022[73]. - Revenue from wigs, wig accessories, and others was HKD 394,009,000, down 6.3% from HKD 420,271,000 year-on-year[97]. - Revenue from high-end human hair extension products decreased by 37.1% to HKD 54,213,000 from HKD 86,222,000[97]. Profitability Metrics - The gross profit margin improved to 23.0%, supported by effective cost control strategies and the depreciation of the Bangladeshi Taka against the US dollar[9]. - The net profit margin increased to 6.2%, up from 4.3% in the same period of 2022, primarily due to a one-time cash gain from the sale of a Ukrainian subsidiary[9]. - Gross profit for the period was HKD 110.0 million, down 3.8% from HKD 114.4 million in the same period last year, with a gross margin increase to 23.0% from 21.1%[17]. - The group reported a net profit of HKD 29.7 million, an increase of 26.9% from HKD 23.4 million in the previous year, driven by currency depreciation and cost control strategies[29]. - The company reported a profit attributable to owners of HKD 31,621,000 for the six months ended June 30, 2023, compared to HKD 26,846,000 for the same period in 2022, representing an increase of 17%[75]. - The total comprehensive income attributable to owners was HKD 19,619,000, a significant recovery from a loss of HKD 6,188,000 in the previous year[75]. Cost Management - The group's cost of goods sold decreased from HKD 427.7 million to HKD 369.2 million, a reduction of 13.7% due to streamlined production processes[16]. - Distribution and selling expenses rose by 29.5% to HKD 11.4 million, mainly due to increased transportation and advertising costs[22]. - The company's administrative expenses decreased to HKD 60,901,000 from HKD 70,754,000, indicating improved cost management[73]. Financial Position - Cash and bank balances increased by 14.7% to HKD 195.0 million, attributed to increased bank borrowings during the period[30]. - The group’s capital debt ratio was 62.0% as of June 30, 2023, slightly up from 61.9% at the end of 2022, indicating sufficient financial resources to meet operational needs[31]. - The company reported a net cash and cash equivalents balance of HKD 99,267,000, up from HKD 78,612,000, indicating improved liquidity[77]. - The company has a total of HKD 535,321,000 in bank borrowings and overdrafts as of June 30, 2023, slightly down from HKD 540,254,000 as of December 31, 2022[120]. - The group has secured bank borrowings with collateral including approximately HKD 89.2 million in bank deposits and HKD 88.0 million in leased land and buildings[40]. Shareholder Information - The interim dividend declared is HKD 0.042 per share, totaling approximately HKD 28.8 million, an increase from HKD 0.017 per share in the same period last year[43]. - The interim payout ratio for this period is 97.0%, significantly higher than the 49.7% payout ratio in the previous year[44]. - Evergreen Holdings holds approximately 50.05% of the issued share capital of the company as of June 30, 2023[57]. - The company has a complex ownership structure with multiple layers of trusts and holdings, indicating a concentrated ownership[57]. Employee and Operational Metrics - As of June 30, 2023, the group employed 24,454 employees, a decrease from 30,391 employees as of June 30, 2022, with total employee expenses amounting to HKD 151.9 million compared to HKD 208.8 million in the same period last year[38]. - The company incurred computer products and services expenses of HKD 540,000 for both periods ended June 30, 2023, and June 30, 2022[136]. Legal and Compliance - A legal dispute involving a supplier with a claim amount of approximately HKD 18 million is ongoing as of May 17, 2023[41]. - The group has no significant contingent liabilities as of June 30, 2023[35]. - The company has not disclosed specific future outlook or guidance in the provided documents[75][76][78]. Other Financial Information - Other income rose by 7.6% to HKD 2.9 million, primarily due to increased bank interest and rental income[19]. - The group recognized a profit of HKD 4,414,000 from the sale of its subsidiary Evergreen Ukraine Investment Limited, which was completed on April 30, 2023[104]. - The group reported a decrease in trade receivables impairment losses to HKD 4,000 from HKD 47,000 year-on-year[102].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全 部或任何部分內容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。 Evergreen Products Group Limited 訓 修 實 業 集 團 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1962） 截 至2023年6月30日 止 六 個 月 的 中 期 業 績 公 告 財務摘要 • 本期間收入為479.2百萬港元，較2022年同期的542.1百萬港元減少11.6%。 • 本期間毛利為110.0百萬港元，較2022年同期的114.4百萬港元減少3.8%。 • 本期間純利為29.7百萬港元，較2022年同期的23.4百萬港元增加26.7%， 主要由於(1)受惠於孟加拉塔卡兌美元貶值；(2)成本控制策略奏效；及 (3)出售烏克蘭附屬公司獲得一次性變現收益。 • 董 事 會 就 本 期 間 宣 派 中 期 股 息 每 股4.2港 仙（2022年6月30日：每 股1.7港 ...

Financial Performance - The group's revenue for the year was HKD 1,100.4 million, a decrease of 8.9% compared to HKD 1,207.4 million in 2021[13] - The profit for the year was HKD 58.3 million, representing a slight increase of 2.2% from HKD 57.1 million in the previous year[13] - The gross profit margin improved during the year, supported by the depreciation of the Taka against the HKD and effective product mix strategies[12] - The company's revenue for the year decreased to HKD 1,100.4 million, a decline of approximately 8.9% compared to HKD 1,207.4 million for the year ended December 31, 2021, primarily due to reduced demand for lower-margin braid products offsetting the increase in sales of higher-margin hair extension and lace wig products[21] - Gross profit for the year reached HKD 257.1 million, an increase of HKD 8.3 million or 3.3% from HKD 248.8 million for the year ended December 31, 2021, driven by strong market demand for hair extension and lace wig products[28] - The gross margin improved to 23.4%, up 2.8 percentage points from 20.6% for the year ended December 31, 2021, mainly due to increased demand for higher-margin products and the depreciation of the Bangladeshi Taka[28] - The company's net profit for the year was HKD 58.3 million, a slight increase of 2.2% from HKD 57.1 million in the previous year, mainly due to a reduction in employee retirement benefits and changes in deferred tax in Bangladesh[39] Dividend and Payout - The board proposed a final dividend of HKD 0.037 per share, totaling approximately HKD 25.4 million, with a total dividend of HKD 0.054 per share for the year[16] - The dividend payout ratio for the year was approximately 63.5%, compared to 28.8% in 2021[16] - The total dividend per share for the year is HKD 0.054, which includes an interim dividend of HKD 0.017 per share, compared to HKD 0.011 and HKD 0.013 per share in 2021[155] Cost Management - The cost of goods sold decreased by 12.0% to HKD 843.3 million from HKD 958.6 million for the year ended December 31, 2021, aligning with the revenue decline[26] - Distribution and selling expenses increased by 40.9% to HKD 26.7 million from HKD 19.0 million in the previous year, primarily due to the reclassification of administrative staff salaries and employee benefits[34] - Administrative expenses decreased by 7.4% to HKD 138.1 million from HKD 149.1 million in the previous year, mainly due to the reclassification of salaries and employee benefits to selling expenses[35] - Financing costs rose by 45.3% to HKD 29.8 million from HKD 20.5 million in the previous year, attributed to increased interest rates[37] Asset Management - The asset-liability ratio decreased from 72.8% as of December 31, 2021, to 61.9%[12] - The company continues to implement inventory and credit control management policies to optimize its asset-liability structure[12] - Cash and bank balances decreased by 2.6% to HKD 170.0 million from HKD 175.0 million as of December 31, 2021, primarily due to loan repayments and trade financing[40] - The capital debt ratio improved to 61.9% as of December 31, 2022, down from 72.8% in the previous year, due to a reduction in bank borrowings[41] Operational Strategy - The company plans to enhance financial performance optimization measures, including inventory control and cost optimization, in the coming year[14] - The company will increase resources for new product research and development to expand sales channels[14] - The company aims to integrate production lines in its Bangladesh factory to achieve a balanced and diversified product portfolio[11] - The company actively increased capital investment in its Bangladeshi production facilities to support market expansion, which partially led to increased depreciation expenses[21] Market Performance - Revenue from high-end hair extension products increased by 17.1% to HKD 184.5 million, up from HKD 157.5 million for the year ended December 31, 2021, due to a strong rebound in market demand as most countries returned to normal[25] - Revenue from Halloween products surged by 84.7% to HKD 43.5 million, compared to HKD 23.6 million for the year ended December 31, 2021, driven by the resumption of festive activities[25] - Revenue from international markets accounted for 97.8% of total revenue, with sales from the United States making up 87.6% of total revenue, consistent with the previous year[165] Corporate Governance - The company has adopted the principles and code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules[88] - The board consists of four executive directors and five non-executive directors, including four independent non-executive directors, ensuring compliance with the Listing Rules regarding independent director appointments[94] - The company emphasizes the importance of good corporate governance standards to enhance shareholder value and ensure accountability[88] - The company has maintained compliance with all code provisions of the Corporate Governance Code, except for the separation of the roles of Chairman and CEO, which is currently held by the same individual[88] - The board believes that having the same person serve as both Chairman and CEO allows for consistent leadership and efficient decision-making[92] Risk Management - The company faces significant risks related to labor supply, as the industry is labor-intensive and relies on a stable supply of skilled and low-cost labor from Bangladesh and China[161] - The company is exposed to intense competition from both existing and new entrants in the hair products industry, which may lead to pricing pressures and reduced market share[162] - The company must continuously innovate and develop new products to respond to changing consumer preferences and trends, as failure to do so may result in loss of competitiveness[166] - The company is subject to various risks and uncertainties that could significantly impact its financial condition and performance, including economic downturns in key markets[159] Shareholder Communication - The company maintains effective communication with shareholders through various channels, including annual general meetings and regular announcements on the stock exchange[149] - The company has established a shareholder communication policy to facilitate timely access to information for shareholders and potential investors[137] - The board of directors and committee chairs participated in the annual general meeting to engage with shareholders and address their inquiries[138]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全 部或任何部分內容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。 Evergreen Products Group Limited 訓 修 實 業 集 團 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1962） 澄 清 公 告 茲提述訓修實業集團有限公司（「本公司」）日期為2023年3月29日有關本公司截至 2022年12月31日止年度的年度業績公告（「該公告」）。本公司董事會（「董事會」）謹 此澄清，建議末期股息將於2023年6月1日（星期四）而非2023年6月16日（星期五） 派付予名列本公司股東名冊的股東。 承董事會命 訓修實業集團有限公司 主席、行政總裁兼執行董事 張有滄 香港，2023年3月31日 ...