Financial Performance - For the fiscal year ending December 31, 2020, the group's revenue was HKD 890.2 million, representing a 14.5% increase compared to HKD 777.4 million in 2019[15]. - The group experienced a significant decline in gross margin, dropping to 17.2% from 33.1% in the previous year, a decrease of 15.9 percentage points[14]. - The net loss for the year was HKD 18.0 million, a decrease of HKD 104.2 million or 120.9% compared to a profit of HKD 86.2 million in 2019[15]. - The gross profit for the year was HKD 152.7 million, a decrease of 40.6% from HKD 257.0 million in the previous year[34]. - Other income rose significantly by 369.0% to HKD 13.6 million, primarily due to government subsidies related to COVID-19[36]. - The cost of goods sold increased by 41.7% to HKD 737.5 million, consistent with the increase in revenue and changes in product mix[30]. - Revenue from wigs, wig accessories, and others increased by 28.6% to HKD 713.5 million, driven by higher sales of lower-margin products[29]. - Sales of high-end human hair extension products decreased by 20.9% to HKD 146.0 million due to changes in demand related to COVID-19[29]. - The group's net loss for the year was HKD 18.0 million, a decrease of HKD 104.2 million or 120.9% compared to a net loss of HKD 86.2 million for the year ended December 31, 2019, largely due to significant negative impacts from COVID-19[47]. Market and Operational Strategies - The company plans to enhance its e-commerce capabilities and develop new platforms targeting African American and Caucasian markets, utilizing virtual reality technology for digital wig sales[17]. - The company is closely monitoring market conditions and adjusting its business strategies to minimize adverse effects from the pandemic[17]. - The company has implemented active cost control measures to mitigate the negative impacts of the pandemic on factory and employee costs[17]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share over the next two years[5]. - The company is focusing on market expansion, targeting a 15% increase in market share over the next fiscal year[94]. - The company aims to improve operational efficiency by 20% through strategic initiatives in the next year[99]. 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[107]. - The board currently consists of six executive directors and five non-executive directors, ensuring a balanced structure for effective independent judgment[116]. - The roles of the chairman and the CEO are currently held by the same individual, which the board believes provides consistent leadership and efficient strategic planning[113]. - The board is responsible for overseeing the company's overall management and ensuring sustainable development while considering the interests of all stakeholders[121]. - The company has established a formal and transparent procedure for the appointment of new directors and a succession plan for the board[117]. - The board receives quarterly updates on the group's performance, condition, recent developments, and prospects to facilitate informed decision-making[122]. Risk Management - The company has a robust internal control and risk management system in place to monitor financial performance and significant transactions[121]. - The board is responsible for the risk management and internal control systems, which are designed to identify and manage significant risks to achieve business objectives[161]. - The company has established a policy for handling and disclosing inside information to prevent any unfair advantage in securities trading[165]. - The internal control and risk management report is submitted to the audit committee and the board at least once a year, with an annual review conducted on the effectiveness of these systems[162]. Employee and Labor Relations - As of December 31, 2020, the group employed 26,699 employees in Bangladesh, an increase from 21,634 employees in 2019, while the total employee expenses amounted to HKD 297.2 million, down from HKD 321.7 million in the previous year[60]. - Direct labor costs accounted for approximately 32.5% of the total cost of goods sold, down from 48.9% in 2019[194]. - The group is heavily reliant on skilled and low-cost labor from Bangladesh and China, which poses risks to production stability[194]. - The group is exposed to risks related to labor supply and increasing labor costs, which could impact financial performance[194]. Future Outlook - The company has set a future outlook with a revenue guidance of $600 million for the next fiscal year, indicating a growth of 20%[3]. - New product launches are expected to contribute an additional $50 million in revenue, with a focus on innovative technologies[4]. - The management team has set a revenue guidance of $200 million for the next fiscal year, representing a 10% increase from the previous year[97]. - The company is exploring potential mergers and acquisitions to enhance its market position, with a budget of $30 million for this purpose[98]. Competition and Market Conditions - The group faces significant competition in the hair products industry, with pressure on pricing and profitability due to low barriers to entry[196]. - The group's financial performance is significantly influenced by the economic conditions in the United States and other international markets[200]. - The company's main market remains the United States, accounting for 88.1% of total revenue, up from 78.5% in the previous year[28].

Financial Performance - For the six months ended June 30, 2020, the group's revenue remained approximately HKD 100 million, but net profit significantly decreased to about HKD 6.5 million, a decline of approximately 86.4% compared to the same period in 2019[13]. - The gross profit margin dropped to 23.8%, down from 33.5% for the same period in 2019, while the net profit margin decreased to 1.8% from 12.8%[13]. - The financial performance for the period worsened compared to 2019, primarily due to increased sales in Q1 followed by a decline in Q2 due to the pandemic[17]. - The group's revenue for the period was HKD 368.2 million, a slight decrease of HKD 7.1 million or 1.9% compared to HKD 375.3 million in the same period of 2019[18]. - The gross profit for the group was HKD 87.5 million, a decrease of HKD 38.1 million or 30.3% compared to HKD 125.6 million in the same period of 2019[20]. - Net profit decreased by 86.4% from HKD 47.9 million to HKD 6.5 million, mainly due to significant negative impacts from COVID-19[23]. - The company reported a total comprehensive income of HKD 2,038,000, a decrease of 96.4% from HKD 55,797,000 in 2019[74]. - Profit before tax decreased significantly to HKD 7,100,000, compared to HKD 47,566,000 in the previous year, representing an 85.1% decline[74]. - Basic earnings per share for the six months ended June 30, 2020, was HKD 0.01, compared to HKD 0.08 in the same period last year[76]. Revenue Breakdown - Revenue from wigs, wig accessories, and others increased by HKD 34.6 million to HKD 295.2 million, representing a growth of 13.3%[18]. - Revenue from high-end human hair extension products decreased by 40.6% to HKD 51.3 million, primarily due to the economic impact of COVID-19[19]. - Revenue from Halloween products decreased by 23.0% to HKD 21.8 million, mainly due to reduced sales volume caused by COVID-19[19]. - Revenue from wigs, wig accessories, and others was HKD 295,161,000, up from HKD 260,609,000, representing an increase of 13.2%[93]. - Revenue from high-end human hair extension products decreased to HKD 51,266,000 from HKD 86,422,000, a decline of 40.7%[93]. Impact of COVID-19 - The COVID-19 pandemic severely impacted business starting in April 2020, particularly affecting sales of higher-margin hair products due to the closure of retail channels[13]. - The board believes the impact of COVID-19 on the group is short-term, with market demand for higher-margin products expected to gradually recover by the end of the year[16]. - The group experienced a significant impact on net profit due to COVID-19, with a shift in product mix leading to decreased sales of higher-margin hair extension products[85]. - The group temporarily halted manufacturing activities due to government-imposed quarantine measures but resumed operations shortly thereafter[85]. Cost Management and Strategies - The group is focused on cost reduction and monitoring pricing strategies to maintain long-term development strength during challenging times[14]. - The group plans to raise funds through a placement of new shares to increase available working capital for current and potential business needs[14]. - Future strategies include establishing more sales offices in other Asian countries and developing private economic zones in Bangladesh[14]. Share Capital and Ownership - As of June 30, 2020, the company had a total of 661,082,000 shares issued, with Zhang Youchang holding 366,379,803 shares, representing 55.42% of the issued share capital[43]. - The company has a significant ownership structure, with Golden Evergreen Limited holding over 50% of the issued share capital through its subsidiary Evergreen Holdings[47]. - The company is controlled by trusts managed by HSBC International Trustee Limited, which are linked to Zhang Youchang and his family[49]. - The shareholding structure indicates that the majority of shares are controlled by a few entities, highlighting concentrated ownership[53]. Expenses and Liabilities - Administrative expenses decreased by 12.5% to HKD 57.9 million, primarily due to enhanced control over expenses in the current economic situation[20]. - Financing costs increased by 8.6% from HKD 9.3 million to HKD 10.1 million compared to the same period in 2019[21]. - The company's total liabilities, including bank borrowings, amounted to HKD 726,098,000 as of June 30, 2020, compared to HKD 718,845,000 as of December 31, 2019, indicating a slight increase of about 1.8%[123]. Cash Flow and Investments - Cash and bank balances increased by 22.2% from HKD 129.2 million to HKD 157.9 million, attributed to extended repayment measures for bank loans and trade financing[24]. - Capital expenditure was approximately HKD 19.4 million, a significant decrease from HKD 68.8 million in the same period of 2019, due to tightened capital spending amid COVID-19 uncertainties[25]. - The company invested HKD 12,922,000 in property, plant, and equipment during the six months ended June 30, 2020, down from HKD 47,441,000 in the same period of 2019[111]. Corporate Governance - The company has adopted high standards of corporate governance, ensuring compliance with the Corporate Governance Code[33]. - The roles of Chairman and CEO are currently held by the same individual, which the board believes enhances leadership consistency and strategic planning efficiency[33]. - The company confirmed compliance with the standards set forth in the Securities Transactions by Directors of Listed Issuers[34].

Financial Performance - The total revenue for the year was HKD 777.4 million, an increase of 6.2% compared to HKD 732.2 million for the previous year[15]. - Overall gross profit increased by 0.5% to HKD 257.0 million, but the gross margin decreased by 1.8 percentage points to 33.1%[19]. - Operating profit for the year was HKD 86.2 million, a decrease of 22.1% from HKD 110.6 million in the previous year[19]. - The company's net profit for the year was HKD 86.2 million, a decrease of HKD 24.4 million or 22.1% compared to the previous year[48]. - The sales cost increased by 9.2% to HKD 520.4 million, consistent with the rise in revenue and the increase in minimum wage for workers in Bangladesh[34]. - Other income remained at HKD 2.9 million, primarily related to warehouse rental income and insurance compensation[38]. - Other gains and losses decreased from HKD 8.2 million to HKD 3.5 million, a decline of 57.3% due to the absence of one-time non-operating items this year[41]. - Distribution and selling expenses decreased by 6.3% to HKD 15.0 million, attributed to effective control of advertising and transportation costs[42]. - Administrative expenses increased by 14.0% to HKD 140.2 million, mainly due to higher employee compensation and pension payments[43]. - Financing costs rose by 33.5% to HKD 20.7 million, with bank loan interest capitalized at HKD 15.9 million[45]. - The company's bank balances and cash decreased by 15.9% from HKD 153.7 million to HKD 129.2 million, primarily due to the use of funds from share placements[49]. - The company's dividend payout ratio for the year is approximately 22.9%, down from 37.3% in 2018, reflecting a cautious approach to future expenditures amid COVID-19 uncertainties[25]. Revenue Growth and Market Strategy - The company plans to focus on product development and improving production efficiency, particularly for higher-priced and higher-margin hair products[20]. - Major customers recognized improvements in product quality and price competitiveness, leading to increased regular orders in the last quarter of the year[11]. - The revenue from high-end hair extension products increased by 11.4% to HKD 184.5 million, driven by increased production capacity in Bangladesh[33]. - The company plans to establish new wholesale offices in Asian countries to sell high-end hair extension products under its own brand[24]. - The company has implemented efficient employee policies in Bangladesh to mitigate the impact of rising labor costs[28]. - The company will continue to redeploy workers within and outside the Bangladesh export processing zone to reduce payroll costs[23]. - The company has secured bank financing with collateral including HKD 93.1 million in bank deposits[60]. - The company did not hedge against currency fluctuations due to the high volatility of the RMB exchange rate[58]. Production and Operational Efficiency - The new production facility in Bangladesh significantly reduced delivery times and production costs, leading to increased sales of higher-margin products[11]. - The company's production facility in Bangladesh generated 94.5% of total revenue, up from 92.3% in the previous year, indicating a strong reliance on this facility for revenue growth[30]. - New facilities in Bangladesh are nearing completion, focusing on product development and improving production efficiency[64]. - The company has invested HKD 50 million in research and development for new technologies aimed at improving service efficiency[111]. Corporate Governance and Management - The management team emphasized the importance of maintaining high corporate governance standards to protect shareholder interests and enhance transparency[117]. - The board currently consists of six executive directors and seven non-executive directors, including five independent non-executive directors[126]. - The company has complied with the listing rules regarding the appointment of at least three independent non-executive directors with appropriate professional qualifications[126]. - The board is responsible for overseeing the company's overall management and ensuring robust development while considering stakeholder interests[131]. - The Audit Committee's responsibilities include overseeing the integrity of the company's financial statements and reviewing the independence and objectivity of external auditors[145]. - The company has established three committees: the audit committee, the remuneration committee, and the nomination committee to oversee specific aspects of the company's affairs[142]. - The company has adopted a director nomination policy to ensure a balanced composition of the Board based on business needs and diverse perspectives[158]. Future Outlook and Projections - The company provided guidance for the next fiscal year, projecting revenue growth of 25% to $625 million[91]. - The company provided an optimistic outlook for the next fiscal year, projecting a revenue growth of 10% to 12% based on current market trends and user acquisition strategies[111]. - The company is exploring potential acquisitions to enhance its market position, with a budget of $200 million allocated for this purpose[91]. - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years[111]. - The company has implemented cost-cutting measures that are projected to save $10 million annually[91]. Shareholder Communication and Engagement - The company aims to maintain a dividend policy that allows shareholders to participate in profits while retaining sufficient reserves for future growth[200]. - The company emphasizes ongoing communication with shareholders through annual general meetings and other platforms[191]. - The company has established various channels for continuous dialogue with shareholders, including printed communications and announcements[180]. - The board has implemented a shareholder communication policy to facilitate timely access to information for shareholders and potential investors[179].

Revenue and Profit Performance - The group's revenue remained stable during the period, but gross profit and net profit decreased due to a significant increase in the minimum wage for workers in Bangladesh, which rose by approximately 44.4%[12] - The group expects the net impact of the wage increase to diminish in the second half of 2019, as it has gradually passed on the cost increase to end customers through price adjustments on existing and new products[12] - The financial performance of the group improved compared to the same period in 2018, primarily due to the economies of scale achieved at the Bangladesh factory[16] - The group's revenue for the period was HKD 375.3 million, an increase of HKD 2.0 million or 0.5% compared to HKD 373.3 million in the same period of 2018[17] - The revenue from high-end human hair extension products increased by HKD 10.6 million to HKD 86.4 million, representing a growth of 14.0%[21] - The revenue from Halloween products rose by HKD 2.8 million to HKD 28.3 million, an increase of 11.0%[21] - The group's gross profit was HKD 125.6 million, a decrease of HKD 6.1 million or 4.6% from HKD 131.7 million in the same period of 2018[24] - The gross profit margin for the group decreased to 33.5% from 35.3% in the same period of 2018, a decline of 1.8%[24] - The net profit for the period was HKD 47.9 million, a decrease of HKD 3.8 million or 7.4% compared to HKD 51.7 million in the same period of 2018[36] Cost and Expense Management - The cost of sales increased by HKD 8.1 million to HKD 249.7 million, an increase of 3.4% due to higher sales volume[22] - Distribution and selling expenses decreased by 35.2% to HKD 5.7 million, mainly due to reduced transportation costs[29] - Administrative expenses increased by 6.1% to HKD 66.2 million, primarily due to higher depreciation and employee compensation[30] - Employee expenses totaled HKD 153.0 million during the period, compared to HKD 129.1 million in the same period of 2018, reflecting an increase in workforce and associated costs[44] Investments and Capital Expenditures - The group spent approximately HKD 68.8 million on fixed assets during the period, compared to HKD 70.3 million in the same period of 2018, primarily to enhance and expand capacity in Bangladesh[39] - The company has no significant investments, acquisitions, or disposals during the period, and no plans for major investments or capital asset acquisitions as of June 30, 2019[45] - The company has allocated HKD 22.1 million for further development of its e-commerce business and expansion of Halloween costume sales[49] Financial Position and Liquidity - The group's bank balances, pledged bank deposits, and cash decreased from HKD 153.7 million on December 31, 2018, to HKD 148.5 million on June 30, 2019, a decline of 3.4%[37] - Trade and other receivables increased from HKD 270.0 million on December 31, 2018, to HKD 336.2 million on June 30, 2019, an increase of 24.5%[37] - As of June 30, 2019, the group's bank financing reached HKD 754.2 million, with a capital debt ratio of 98.2%, up from 91.0% on December 31, 2018[38] - The company’s cash and cash equivalents at the end of the period stood at HKD 60,619,000, compared to HKD 82,959,000 at the same time last year[119] Shareholder Information and Dividends - The mid-term dividend declared is HKD 0.01 per share, totaling approximately HKD 6.2 million, with a payout ratio decreasing from 49.9% to 12.9%[49] - The total number of shares issued as of the report date is 615,000,000[49] - Evergreen Holdings holds 336,903,803 shares, representing 54.78% of the issued shares[80] - The company declared dividends amounting to HKD 15,375,000 during the period, down from HKD 50,000,000 in the previous year[119] Lease Accounting and Financial Reporting - The group has adopted the Hong Kong Financial Reporting Standard No. 16, which replaces the previous standard and is effective from January 1, 2019[126] - The application of HKFRS 16 has led to significant changes in accounting policies, particularly in the recognition of lease liabilities and right-of-use assets[132] - The group will present right-of-use assets as a separate line item in the consolidated financial position statement[136] - The company adopted the transitional provisions of HKFRS 16, recognizing additional lease liabilities and right-of-use assets amounting to HKD 8,630,000 as of January 1, 2019[150] Inventory and Production - Total inventory as of June 30, 2019, was HKD 433,986,000, slightly up from HKD 430,889,000 as of December 31, 2018[198] - Raw materials inventory decreased to HKD 327,445,000 from HKD 342,430,000[198] - Work-in-progress inventory decreased to HKD 49,170,000 from HKD 51,272,000[198] - Finished goods inventory increased to HKD 57,371,000 from HKD 37,187,000[198] Corporate Governance and Share Incentive Plan - The company has a strong governance structure with multiple trusts and holdings ensuring control over major shareholdings[74] - Under the share incentive plan adopted on December 11, 2017, a total of 5,333,334 shares have been granted, representing approximately 0.87% of the total issued shares as of June 30, 2019[88] - The maximum number of shares that can be issued under the share incentive plan is 6,150,000 shares, which is 1% of the total issued shares at the time of adoption[88]

Financial Performance - The group's revenue for the year was HKD 732.2 million, an increase of 13.1% compared to HKD 647.3 million in 2017[15]. - Gross profit increased by 11.1% to HKD 255.8 million, with a slight decrease in gross margin by 0.7 percentage points to 34.9% due to initial operating costs of new factories[15]. - Adjusted operating profit for the year was HKD 107.0 million, representing a 15.4% increase from HKD 92.7 million in the previous year[15]. - The company reported a revenue of HKD 732.2 million for the year, an increase of HKD 84.9 million or 13.1% compared to HKD 647.3 million for the year ended December 31, 2017[26]. - The revenue from the company's main product category, wigs and wig accessories, accounted for 71.9% of total revenue, up from 69.0% in the previous year[29]. - The gross profit for the year reached HKD 255.8 million, an increase of HKD 25.6 million or 11.1% from HKD 230.2 million in the previous year, with a gross margin of 34.9%[32]. - The revenue from high-end human hair extension products increased by 3.5% to HKD 165.6 million, driven by increased production capacity in Bangladesh[29]. - Net profit for the year was HKD 110.6 million, a slight increase of 1.0% from HKD 109.5 million, attributed to one-time non-operating items and increased profit from manufacturing and sales[44]. - Adjusted net profit increased by 15.4% to HKD 107.0 million from HKD 92.7 million, excluding certain one-time items[45]. - The company's net profit margin decreased to 37.3% from 45.7% in the previous year, reflecting a shift in the product mix and initial operational costs of new facilities[24]. Expansion and Production - The company plans to expand its production facilities in Bangladesh, with a total construction area expected to increase by approximately 100,000 square meters[16]. - New production facilities in Bangladesh are expected to meet additional product demands from existing and new customers, shortening delivery times[16]. - The second phase of the dyeing facility is under construction and is expected to be completed in 2019[14]. - The company’s production capacity has significantly increased due to the successful transfer of most production to Bangladesh, which has mitigated the impact of the US-China trade war[23]. - The construction of the new facilities in Bangladesh is expected to continue at full speed until at least the end of 2019, after which it will slow down[59]. - The company is training workers at all levels to integrate dyeing and hair product production technologies in Bangladesh to enhance production efficiency[16]. - The company is training workers at various levels to integrate dyeing and hair production technologies in Bangladesh, which is anticipated to improve facility utilization[59]. Strategic Plans - The company plans to focus more on e-commerce to sell products directly to end customers in the coming years[23]. - The company plans to establish more sales offices in other Asian countries to enhance sales and profit margins[17]. - The company intends to set up one-stop hair care centers in Asian countries such as China and Japan to provide customized wig solutions for hair loss issues[59]. - The company is exploring opportunities for vertical integration to improve profitability[11]. - The company plans to establish more sales offices in other Asian countries to promote high-end hair extension products, aiming to boost sales and profit margins[59]. Expenses and Costs - The company’s distribution and selling expenses increased by 1.9% to HKD 16.0 million, primarily due to higher advertising and commission expenses[38]. - Administrative expenses increased by 16.4% to HKD 123.0 million from HKD 105.7 million, primarily due to higher employee compensation and professional fees post-listing[39]. - Financing costs rose by 24.0% to HKD 15.5 million from HKD 12.5 million, with bank loan interest capitalized at HKD 9.7 million[41]. - Other income decreased by 29.3% to HKD 2.9 million, primarily due to reduced interest income from life insurance contracts[34]. - Other expenses decreased significantly by 92.8% to HKD 1.3 million from HKD 18.0 million, mainly due to reduced donations and absence of listing expenses[40]. - Direct labor costs accounted for approximately 43.1% of the total cost of goods sold for the year, a slight decrease from 44.0% in 2017[200]. - The company faces significant risks related to labor supply and cost increases, which could impact product quality and overall performance[200]. Corporate Governance - The company has maintained compliance with corporate governance codes, ensuring transparency and accountability in its operations[110]. - The company has adopted a clear separation of roles between the chairman and CEO, aligning with best practices in corporate governance[117]. - The board currently consists of six executive directors and two non-executive directors, along with five independent non-executive directors, ensuring a diverse governance structure[120]. - The company has implemented a risk management and internal control system, which was reviewed by the Audit Committee[140]. - The board has ensured that all directors have devoted sufficient time and attention to the company's affairs[138]. - The company has adopted a written guideline for securities trading that meets or exceeds the standards set by the listing rules, ensuring compliance among employees[129]. - The company has established a policy for handling and disclosing inside information to prevent any individual from having an advantage in securities trading[172]. Shareholder Relations - The company has set up various channels to facilitate ongoing dialogue with shareholders, including printed communications and announcements on its website[175]. - The company is committed to enhancing investor relations and maintaining continuous dialogue with shareholders and potential investors[187]. - The board and audit committee chairpersons attended the annual general meeting to engage with shareholders and answer questions[177]. - The company plans to distribute at least 20% of its distributable net profit as dividends each fiscal year, subject to certain conditions and factors[196]. - The company has proposed a final dividend of HKD 0.025 per share, totaling approximately HKD 15.4 million, along with an interim dividend of HKD 0.042 per share, making the total dividend HKD 0.067 per share for the year[193].