Financial Performance - Total revenue for the six months ended June 30, 2022, was approximately HKD 142.8 million, a decrease of about 18.3% compared to HKD 174.9 million in the same period last year[3] - Gross profit amounted to HKD 12.2 million, with a gross margin of 8.6%, down from HKD 35.4 million and 20.2% respectively in the previous year[3] - Loss attributable to the company's owners for the period was approximately HKD 24.7 million, compared to a loss of HKD 2.3 million in the same period last year[3] - Revenue for the six months ended June 30, 2022, was HKD 142,842 thousand, a decrease of 18.4% compared to HKD 174,930 thousand for the same period in 2021[65] - Gross profit for the same period was HKD 12,222 thousand, down 65.5% from HKD 35,401 thousand in 2021[65] - The company reported a loss before tax of HKD 28,099 thousand, compared to a profit of HKD 64 thousand in the previous year[65] - Total comprehensive loss attributable to owners of the company was HKD 24,749 thousand, significantly higher than the loss of HKD 2,333 thousand in the prior year[65] - Basic loss per share for the period was HKD 3.87, compared to HKD 0.36 in the same period last year[65] Financial Position - The company maintained a solid financial position with cash on hand of approximately HKD 99.0 million as of June 30, 2022[7] - The net current assets as of June 30, 2022, were approximately HKD 197.2 million, down from HKD 224.5 million as of December 31, 2021[16] - The debt-to-equity ratio as of June 30, 2022, was 15.1%, slightly up from 14.6% as of December 31, 2021[17] - Non-current assets as of June 30, 2022, totaled HKD 150,055 thousand, an increase from HKD 147,677 thousand at the end of 2021[72] - Current assets decreased to HKD 308,532 thousand from HKD 356,335 thousand at the end of 2021, primarily due to a reduction in inventory[72] - Total liabilities decreased from HKD 131,883 thousand to HKD 111,356 thousand, reflecting a reduction in trade and other payables[72] - Cash and cash equivalents as of June 30, 2022, were HKD 98,951 thousand, down from HKD 119,867 thousand at the end of 2021[72] - The company had cash and cash equivalents of HKD 98,951,000 at the end of the period, down from HKD 165,048,000 at the beginning of the period[85] Investments and Capital Expenditure - The group plans to make further investments of HKD 21 million in 卓盈 in the second half of 2022[26] - The group's capital expenditure for the interim period was approximately HKD 9.7 million, compared to HKD 4.0 million in the first half of 2021[19] - The company capitalized approximately HKD 3,446,000 on production equipment purchases to enhance production capacity[125] - The company made an initial investment of 2,282 thousand HKD for a 49% stake in Ardo Living Limited, which focuses on online home goods trading[144] - The company has committed to further investment of 21,000 thousand HKD in 卓盈, contingent on financing arrangements[149] Market Focus and Strategy - The company is focusing on the U.S. market, which is expected to see a compound annual growth rate of 4.5% in the denim market by 2028[13] - The company is actively seeking diversification opportunities, including investments in property in Hong Kong and overseas sales of innovative home products[12] - The company has introduced new eco-friendly materials in its production process, which are well-received by customers despite higher costs[9] Shareholder Information - Wan Feng Investment holds 75% of the issued share capital, making it the controlling company[44] - Major shareholders include Mr. Dong Xin Kang (30%), Mr. Dong Wei Lin and Mr. Dong Zhuo Ming (20% each), and Ms. Dong Hui Ling and Ms. Dong Hui Li (10% each)[48] Compliance and Governance - The board of directors has confirmed compliance with the standard code of conduct for securities trading as of June 30, 2022[34] - The audit committee reviewed the group's unaudited interim results for the six months ended June 30, 2022[37] - The financial statements were reviewed in accordance with Hong Kong Accounting Standards[62] - No matters were found that would lead to a belief that the financial statements were not prepared in accordance with Hong Kong Accounting Standards[63] Other Financial Details - The company incurred research and development expenses of HKD 5,225 thousand, up from HKD 4,889 thousand in the previous year[65] - The company recognized a deferred tax expense of HKD 3,447,000 for the period, compared to HKD 358,000 in the previous year[119] - The company recognized a right-of-use asset of 4,574 thousand HKD during the reporting period[157] - The total interest expense on lease liabilities paid to 滙星集團有限公司 was 21 thousand HKD for the six months ended June 30, 2022[157] - The company did not declare or recommend any dividends for the interim period[120] - The company experienced a net cash outflow from financing activities of HKD 3,094,000, an improvement compared to HKD 7,376,000 in the previous year[85] - The company incurred a net foreign exchange loss of HKD 1,471,000, compared to a gain of HKD 248,000 in the previous year[114]

Financial Performance - The company's revenue for the fiscal year ended December 31, 2021, was HKD 363.0 million, a significant increase of 42% compared to HKD 255.4 million in 2020[3] - The company reported a substantial improvement in gross profit margin, which nearly doubled from 9.3% to 18.0%[3] - Cash and cash equivalents at the end of the fiscal year were approximately HKD 119.9 million, indicating a stable financial position[4] - The company achieved natural sales growth despite rising material costs, driven by the recovery of the retail market in the U.S.[5] - As of December 31, 2021, the bank balance and cash decreased by HKD 41.0 million to HKD 119.9 million, primarily due to the repayment of bank loans totaling HKD 31.0 million[24] - Inventory increased by HKD 15.4 million to HKD 160.6 million, attributed to the planned shipment of finished goods in early 2022[24] - Trade receivables increased by HKD 13.0 million to HKD 41.5 million, consistent with the increase in revenue compared to the same period in 2020[24] - Current liabilities remained stable at HKD 131.9 million, with trade and other payables increasing by HKD 16.7 million[24] - The group's capital expenditure for the year was HKD 8.1 million, consistent with the previous year, mainly due to investments in properties, plants, and equipment[31] - As of December 31, 2021, the group's net current assets were approximately HKD 224.5 million, down from HKD 236.3 million in 2020[26] - The group's debt-to-equity ratio was 14.6% as of December 31, 2021, down from 19.8% in 2020[27] Corporate Governance - The board of directors includes independent non-executive directors who provide independent advice and oversight[64] - The company has arranged appropriate insurance for directors and senior management against liabilities incurred in the course of business[69] - The company has adopted the corporate governance code as per the listing rules since the listing date and has complied with the standards set forth[114] - The board of directors consists of three executive directors and three independent non-executive directors, ensuring independent oversight[164] - The board held a total of four meetings during the year to discuss business development and financial performance[166] - Independent non-executive directors confirmed their independence according to the listing rules, maintaining their status as independent individuals[168] - The company is committed to high standards of corporate governance, adhering to all provisions of the corporate governance code effective as of December 31, 2021[151] - The board has delegated authority to management for executing business strategies and managing daily operations[152] - The board's responsibilities include overseeing business performance, strategy decisions, and ensuring effective internal controls and risk management systems[158] - The board of directors has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific matters of the company[178] Shareholder Information - As of December 31, 2021, major shareholders including Wan Fung Investment hold 480,000,000 shares, representing a 75% equity interest in the company[82] - The board members, including Mr. Tong Xin Kang, Mr. Dong Wei Ting, and Mr. Dong Zhuo Ming, each hold 480,000,000 shares, equating to a 75% equity interest[82] - Wan Fung Investment is recognized as the controlling shareholder, owning 75% of the issued shares post-capitalization issuance and share sale[77] - The company has established a concert party agreement among its major shareholders to ensure unified management and operational control[72] - The equity interests of the board members and major shareholders are in compliance with the Securities and Futures Ordinance[78] - The company maintains transparency in reporting shareholder interests as mandated by the Securities and Futures Ordinance[78] - The equity structure indicates a strong concentration of ownership among a few key individuals, enhancing governance and decision-making efficiency[84] Environmental and Operational Initiatives - The group has established a wastewater treatment facility at its Zhongshan factory to improve environmental performance and reduce utility costs[125] - The group has implemented air filtration and regulation systems to improve air quality and operational efficiency in its production facilities[121] Future Plans and Investments - The company plans to invest in a property project in Tsuen Wan to increase passive income through dividends and capital gains[15] - The company is installing large dyeing and finishing equipment from Germany and Italy to expand its production capabilities[11] - The group has no specific plans for significant investments or capital assets for the upcoming year as of December 31, 2021[135] Stock Options and Remuneration - The company has a stock option plan that allows for the issuance of up to 64,000,000 shares, representing 10% of the total issued shares as of the report date[98] - The remaining term of the stock option plan is approximately six years and two months, expiring on June 19, 2028[104] - No stock options have been granted, agreed upon, exercised, or canceled under the stock option plan as of the report date[92] - The remuneration of the company's directors and senior management is determined by the remuneration committee based on qualifications, experience, and market conditions[113] Business Operations - The main business of the group is the manufacturing and sales of denim fabric[53] - The largest customer accounted for 16.0% of the group's sales, while the top five customers together represented 52.3%[120] - The group has maintained good relationships with suppliers and subcontractors, with no significant disputes reported during the year[119] - The company has not engaged in any significant contracts with controlling shareholders or their subsidiaries during the year[109] Audit and Financial Review - The consolidated financial statements for the year were audited by Deloitte, with no change in auditors since the listing date[147] - The Audit Committee consists of three independent non-executive directors, with the chairman having professional qualifications and experience in accounting and finance[180] - The Audit Committee reviewed the audited consolidated financial statements for the year ended December 31, 2020, and the unaudited interim financial statements for the six months ended June 30, 2021[180] - The company’s independent auditor participated in discussions regarding the audit and internal control matters during the Audit Committee meetings[180]

Financial Performance - Total revenue for the first half of 2021 reached HKD 174.9 million, a 54.8% increase compared to HKD 112.9 million in the same period of 2020[6] - Gross profit surged to HKD 35.4 million, up from HKD 9.0 million, resulting in a gross margin of 20.2%, compared to 8.0% in the previous year[6] - Loss attributable to shareholders decreased by 91.1% to HKD 2.3 million, compared to HKD 26.3 million in the first half of 2020[6] - Revenue for the six months ended June 30, 2021, was HKD 174,930,000, an increase of 25.5% compared to HKD 139,529,000 for the same period in 2020[78] - Gross profit for the same period was HKD 35,401,000, significantly up from HKD 8,985,000, reflecting a gross margin improvement[78] - The company reported a loss attributable to owners of HKD 2,333,000 for the six months ended June 30, 2021, compared to a loss of HKD 26,280,000 in the prior year, indicating a substantial reduction in losses[78] - The company reported a pre-tax profit of HKD 64,000 for the six months ended June 30, 2021, compared to a loss of HKD 25,654,000 in the same period of 2020[93] - The company reported a pre-tax loss of HKD 2,333,000 for the six months ended June 30, 2021, compared to a loss of HKD 26,280,000 for the same period in 2020, indicating a significant improvement[129] Cash and Assets - Cash and cash equivalents stood at approximately HKD 165.0 million as of June 30, 2021, slightly up from HKD 160.9 million at the end of 2020[7] - As of June 30, 2021, the net current assets were approximately HKD 233.0 million, a slight decrease from HKD 236.3 million as of December 31, 2020[26] - The bank balance and cash as of June 30, 2021, were approximately HKD 165.0 million, compared to HKD 160.9 million as of December 31, 2020[26] - Total assets as of June 30, 2021, were HKD 410,022,000, an increase from HKD 369,514,000 as of December 31, 2020[81] - The company’s net assets as of June 30, 2021, were HKD 373,008,000, slightly down from HKD 375,341,000 as of December 31, 2020[85] Liabilities and Borrowings - The bank borrowings as of June 30, 2021, were approximately HKD 64.0 million, down from HKD 66.6 million as of December 31, 2020[26] - Current liabilities increased to HKD 177,013,000 from HKD 133,171,000, showing a 32.9% rise[82] - The total bank borrowings as of June 30, 2021, were approximately HKD 61,479,000, an increase from HKD 37,157,000 as of June 30, 2020[146] - The interest rates on the group's borrowings ranged from 1.34% to 2.28% per annum, compared to 1.35% to 4.19% as of December 31, 2020[146] Inventory and Receivables - Trade receivables increased to approximately HKD 51.4 million, up from HKD 28.5 million, reflecting a recovery in business post-COVID-19[14] - Inventory increased to HKD 161,681,000 from HKD 145,210,000, indicating a 11.4% rise in stock levels[81] - Trade and other receivables rose to HKD 82,491,000 from HKD 58,092,000, reflecting a 41.9% increase[81] - Trade receivables increased to HKD 51,944,000 from HKD 29,108,000, marking an increase of 78.3%[136] Investments and Expenditures - The capital expenditure during the interim period was approximately HKD 4.0 million, an increase from HKD 1.5 million in the same period of the previous year[29] - The company plans to utilize the remaining proceeds for purchasing production machinery and equipment, with an expected completion date in 2022[20] - The company purchased production equipment worth approximately HKD 4,027,000 during the interim period, significantly up from HKD 1,465,000 in the same period last year[135] Research and Development - The company continues to invest in R&D, focusing on eco-friendly materials such as bamboo and recycled cotton for new denim products[8] - The company plans to introduce more eco-friendly materials in its product offerings to align with its commitment to sustainable development[15] Market Outlook and Strategy - Management maintains a cautiously optimistic outlook for the second half of 2021 and 2022, despite ongoing challenges in the retail sector[15] - The company aims to enhance its market penetration and brand image through trade exhibitions and collaborations with renowned designers[16] - The company plans to continue expanding its market presence in China and other regions, focusing on the production of denim fabrics[110] Shareholding and Governance - The company has a controlling interest of 75% in Wan Feng Investment, which holds 480,000,000 shares[54] - Mr. Tong Xinkang, Mr. Dong Weiting, and Mr. Tong Zhuoming each own 75% equity in the company through their controlled entities, holding 480,000,000 shares each[48] - Wan Feng Investment is owned 30% by Mr. Tong Xinkang, 20% each by Mr. Dong Weiting and Mr. Tong Zhuoming, and 10% each by their spouses[61] - The company has established a concert party agreement among its major shareholders to ensure unified management and operational control[62] - All major shareholders, including Mr. Tong Xinkang and his associates, are considered to have beneficial ownership of the shares held by Wan Feng Investment[62] - The company has disclosed that all directors hold 480,000,000 shares, representing 75% of the total equity[59] - The equity interests of the directors and major shareholders are fully aligned, with no conflicting interests reported[67] - The company is committed to maintaining transparency regarding shareholdings and interests as per regulatory requirements[67] - The directors have confirmed that there are no undisclosed interests or short positions in the company's shares[67] Other Financial Information - Total other income for the six months ended June 30, 2021, was HKD 3,312,000, a decrease of 29.5% from HKD 4,724,000 for the same period in 2020[117] - Bank deposit interest income decreased significantly to HKD 183,000 from HKD 1,049,000, representing an 82.6% decline[121] - Total employee benefits expenses capitalized as manufacturing inventory costs increased to HKD 28,273,000 from HKD 24,416,000, a rise of 15.3%[122] - Total tax expenses for the period were HKD 2,397,000, up from HKD 626,000 in the previous year, reflecting a substantial increase[126] - The company did not declare any dividends for the interim period, compared to HKD 5,120,000 declared in the previous year[127] - There were no significant events affecting the group from June 30, 2021, to the report date[68] - The company has not reported any significant impacts from the recent accounting standards changes on its financial performance[105]

Financial Performance - For the year ended December 31, 2020, the group recorded total revenue of HKD 255.4 million, a decrease of 49.5% from HKD 506.3 million in 2019[4] - Gross profit for the same period was HKD 23.8 million, down 76.8% from HKD 102.7 million in 2019, resulting in a gross margin of 9.3% compared to 20.3% in 2019[4] - The company reported a loss attributable to owners of HKD 41.0 million, compared to a profit of HKD 5.27 million in 2019, with a loss per share of HKD 0.0641[4] - The company's revenue decreased by approximately 49.5% from about HKD 506.3 million in 2019 to about HKD 255.4 million in 2020[23] - The company reported a loss attributable to shareholders of approximately HKD 41.0 million for 2020, compared to a profit of about HKD 5.3 million in 2019[23] Cash and Financial Position - The group maintained a stable cash position with cash and cash equivalents of approximately HKD 160.9 million, slightly up from HKD 156.8 million in 2019[4] - Cash and bank balances increased by HKD 4.1 million to HKD 160.9 million as of December 31, 2020[22] - Current liabilities decreased by HKD 30.5 million to HKD 133.2 million as of December 31, 2020[22] - The company's capital expenditure for the year was HKD 8.1 million, down from HKD 41.9 million in 2019[30] - The capital-to-debt ratio as of December 31, 2020, was 19.8%, compared to 17.5% in 2019[26] Operational Impact and Recovery - The COVID-19 pandemic led to a significant impact on the textile industry, with the group managing to retain about 50% of sales despite the challenges[9] - The company anticipates a gradual recovery in business as agreements with partners regarding cost-sharing are expected to stabilize operations[14] - The management remains optimistic about future business development, particularly with the rollout of COVID-19 vaccines globally[11] Environmental Initiatives - The group plans to continue its R&D efforts, focusing on developing eco-friendly products to enhance competitiveness and protect the environment[11] - A wastewater treatment facility is set to begin operations in April 2021, aimed at improving water reuse and reducing environmental footprint[11] - The group has taken measures to reduce carbon emissions and fossil fuel consumption while maintaining production capacity[119] - The group has established a wastewater treatment facility in Zhongshan to improve environmental performance and reduce utility costs[119] Employee and Governance - The company has 394 employees as of December 31, 2020, down from 443 in 2019[29] - The group has a strong focus on employee development, offering competitive compensation and benefits, including bonuses and share incentives[114] - The independent non-executive directors provide valuable expertise in the textile and apparel industry, enhancing the company's governance[157] - The company has maintained high standards of corporate governance and complied with all code provisions during the reporting period[144] Shareholder and Equity Structure - As of December 31, 2020, the company and its controlled entities hold 480,000,000 shares, representing a 75% equity interest[66] - The major shareholders include Mr. Tong Xinkang, Mr. Dong Weiting, and Mr. Dong Zhuoming, each holding 480,000,000 shares, equating to a 75% equity interest[76] - The company maintains a consistent equity structure with all major shareholders holding equal shares in the controlled entity[66] - The equity percentage for all major shareholders is uniformly 75%[76] Corporate Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code during the year ended December 31, 2020, and up to the date of this report[110] - The board confirmed its responsibility for the preparation of the consolidated financial statements in accordance with statutory requirements and applicable accounting standards[193] - The company has established a risk management and internal control system to ensure effective operations and compliance with applicable regulations[195] - The board believes that the risk management and internal control systems are adequate and effective for the year[195] Meetings and Committees - The board held a total of four meetings during the year to discuss business development and financial performance[159] - The audit committee held 3 meetings this year, with all members present, ensuring thorough oversight of financial reporting[176] - The remuneration committee reviewed and discussed the remuneration of directors and senior management, holding 1 meeting with full attendance[181] - The nomination committee met once this year, with all members present, focusing on board composition and diversity[189] Future Plans and Investments - The company plans to utilize the remaining proceeds from the share issuance for enhancing product development capabilities and general working capital[19] - There are no significant future investment or capital asset plans disclosed as of December 31, 2020[131] - The company did not engage in any major acquisitions or disposals during the year[133]

Financial Performance - Total revenue for the first half of 2020 was HKD 112.99 million, a decrease of 58.5% compared to HKD 271.96 million in the same period of 2019[4] - Gross profit dropped to HKD 8.99 million, resulting in a gross margin of 8.0%, down from 25.2% in the first half of 2019[4] - The company reported a loss attributable to shareholders of HKD 26.28 million, compared to a profit of HKD 13.54 million in the same period last year[4] - Revenue for the six months ended June 30, 2020, was HKD 112,992,000, a decrease of 58.5% compared to HKD 271,962,000 for the same period in 2019[136] - Gross profit for the same period was HKD 8,985,000, down 86.8% from HKD 68,408,000 in 2019[103] - The company reported a loss before tax of HKD 25,654,000, compared to a profit of HKD 20,302,000 in the previous year[103] - Total comprehensive loss attributable to owners of the company for the period was HKD 26,280,000, compared to a profit of HKD 13,537,000 in 2019[103] - Basic loss per share for the period was HKD 4.11, compared to earnings of HKD 2.12 per share in the same period last year[103] Cash and Liquidity - Cash and cash equivalents as of June 30, 2020, were approximately HKD 118.8 million, down from HKD 156.8 million at the end of 2019[12] - As of June 30, 2020, the net current assets were approximately HKD 252.6 million, down from HKD 276.8 million as of December 31, 2019[21] - The bank balance and cash as of June 30, 2020, were approximately HKD 118.8 million, compared to HKD 156.8 million as of December 31, 2019[21] - The company reported a net cash decrease of HKD (38,053) thousand, compared to HKD (19,597) thousand in the previous year[116] - The company’s cash and cash equivalents at the end of the period were HKD 118,774 thousand, down from HKD 166,680 thousand at the end of the previous year[116] Operational Challenges - The company anticipates a cautious outlook for the second half of 2020 due to ongoing uncertainties from the COVID-19 pandemic and US-China relations[13] - The company’s operational activities were significantly affected by COVID-19, leading to a temporary halt in production from late January to mid-February 2020[127] - The company received government subsidies related to COVID-19, which impacted its financial performance positively despite overall revenue decline[127] Inventory and Cost Management - Inventory levels were closely monitored, resulting in a reduction of approximately HKD 22.3 million to HKD 179.8 million[12] - The company incurred a total cost of goods sold of HKD 104,007,000, significantly down from HKD 203,554,000 in the previous year[148] - The company’s inventory decreased by HKD 22,271 thousand, compared to a decrease of HKD 29,124 thousand in the previous year[113] Future Plans and Investments - The company plans to enhance R&D efforts, focusing on developing eco-friendly and sustainable products[13] - A new dyeing machine has been purchased, expected to be installed and operational by Q1 2021, aimed at reducing production costs and enhancing sustainability[13] - The company plans to utilize the remaining proceeds from the IPO for machinery procurement and market expansion by the end of 2021[17] - The company has no specific plans for significant investments or capital assets as of June 30, 2020[35] Shareholder and Ownership Structure - The company has a total of 480,000,000 shares held by each of the three directors, representing a 75% equity interest in the company[44] - The controlling shareholder, Wan Fung Investment, owns 75% of the issued shares, making it the parent company of the firm[50] - Each director is part of a concert party agreement, confirming their coordinated management and operational control over the subsidiary companies[49] - The ownership structure of Wan Fung Investment includes 30% held by Dong Xin Kang, 20% each by Dong Wei Lu and Dong Zhuo Ming, and 10% each by their spouses[88] - The directors' equity interests are disclosed under the Securities and Futures Ordinance, ensuring compliance with regulatory requirements[51] Debt and Liabilities - The bank borrowings as of June 30, 2020, were approximately HKD 71.9 million, an increase from HKD 65.0 million as of December 31, 2019[21] - The capital debt ratio as of June 30, 2020, was 198%, significantly up from 17.2% as of December 31, 2019[23] - Total liabilities decreased to HKD 252,551,000 from HKD 276,811,000 at the end of 2019[109] - The group reported a total of HKD 33,240,000 in trade and other payables, down from HKD 80,594,000, indicating a significant reduction in liabilities[168] Strategic Initiatives - The company aims to strengthen its brand image and market share across various regions, leveraging trade exhibitions and collaborations with renowned designers[13] - The company is preparing for a potential public listing, continuing to act in accordance with the concert party agreement post-listing[49] - The company is committed to transparency in its disclosures regarding director and executive interests[51]

Financial Performance - The company's revenue for the fiscal year ended December 31, 2019, was HKD 506.3 million, a decrease of 21% from HKD 640.7 million in 2018[3] - Gross profit for the same period was HKD 102.7 million, down from HKD 200.6 million in 2018, indicating a significant decline in profitability[3] - Net profit after tax was HKD 5.3 million, compared to HKD 72.8 million in the previous year, reflecting a substantial drop in earnings[3] - Cash and cash equivalents as of December 31, 2019, stood at HKD 156.8 million, supporting the company's stable financial position[4] - As of December 31, 2019, bank balances and cash decreased by HKD 28.3 million to HKD 156.8 million, primarily due to property, plant, and equipment acquisitions totaling HKD 41.9 million[20] - Inventory decreased by HKD 62.0 million to HKD 202.1 million, attributed to reduced sales orders due to the tense situation of the US-China trade war in the second half of 2019[20] - Current liabilities decreased by HKD 73.1 million to HKD 158.7 million, mainly due to lower procurement and bank loan repayments near the end of 2019 compared to the same period in 2018[20] - As of December 31, 2019, the net current asset value was approximately HKD 276.8 million, down from HKD 311.4 million in 2018[22] - The capital expenditure for the year was HKD 41.9 million, significantly higher than HKD 14.7 million in 2018, primarily due to investments in property, plant, and equipment[27] - The debt-to-equity ratio as of December 31, 2019, was 17.5%, a decrease from 26.5% in 2018, calculated based on total borrowings against total equity[23] - As of December 31, 2019, bank borrowings amounted to HKD 65.0 million, down from HKD 108.0 million in 2018[22] Investment and Growth Plans - The company plans to invest in new machinery in 2020 to enhance production capacity and reduce costs, with a total of HKD 140.1 million allocated for machinery procurement[14] - The net proceeds from the IPO, amounting to approximately HKD 147.0 million, are planned for various uses, including enhancing production capabilities and market penetration[13] - The anticipated global economic growth remains low due to trade tensions and the COVID-19 pandemic, leading to a more conservative outlook for the upcoming year[8] - The company aims to expand its market presence in Europe and China, participating in trade exhibitions and collaborating with renowned designers[8] Shareholder Information - The company has proposed a final dividend of HKD 0.008 per ordinary share for the fiscal year ended December 31, 2019, as a gesture of appreciation to shareholders[4] - The company reported a final dividend of HKD 0.8 per share, subject to shareholder approval at the annual general meeting on May 28, 2020, with expected payment on June 12, 2020[48] - As of December 31, 2019, the company's distributable reserves amounted to approximately HKD 127,644,000[54] Corporate Governance - The company has complied with all provisions of the Corporate Governance Code during the financial year ending December 31, 2019[107] - The company has established an audit committee to oversee financial reporting and compliance[108] - The board of directors consists of three executive directors and three independent non-executive directors, ensuring independent oversight[156] - The board held a total of five meetings during the year to discuss business development and financial performance[158] - All independent non-executive directors confirmed their independence according to the listing rules[160] - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with clear written terms of reference[172] - The Audit Committee held three meetings this year, with all members present at each meeting, ensuring thorough oversight of financial reporting and internal controls[175] - The Remuneration Committee reviewed and discussed the remuneration of directors and senior management, with three individuals earning less than HKD 1,000,000 and one earning between HKD 1,000,001 and HKD 2,000,000[179] - The Nomination Committee conducted a review of the board's structure and diversity policy, concluding that the current composition meets the company's needs[184] - The company encourages continuous professional development for all directors, ensuring they are updated on corporate governance practices and regulatory requirements[164] Environmental and Social Responsibility - The group has adopted geothermal energy for steam production, transitioning from coal-fired boilers in collaboration with local government[113] - The group has replaced some existing equipment with more resource-efficient models to reduce wastewater pollution and fossil fuel consumption[114] - The group made charitable donations of approximately HKD 429,000 during the year[49] Risk Management and Compliance - The board confirmed that the risk management and internal control systems are adequate and effective, with a review conducted every six months[190] - The company has a structured internal control system aimed at ensuring reliable financial reporting and compliance with applicable regulations[190] - The group has confirmed compliance with relevant laws and regulations in Hong Kong and China, with no significant violations reported[115] Employee Relations - The company did not experience any major issues with employees and had no disputes that could disrupt operations[26] - The group emphasizes employee development and has implemented a compensation policy to reward experienced employees, including bonuses and stock incentives[109] - The remuneration of the group's directors and senior management is determined by the remuneration committee based on qualifications, experience, ability, and market conditions[100] Major Shareholders and Ownership Structure - Wan Feng Investment holds 75% of the issued shares, making it the controlling company of the firm[69] - The major shareholders include Mr. Dong Xinkang, Mr. Dong Zhaoting, and Mr. Dong Zhuoming, each holding 30%, 20%, and 20% respectively[70] - As of December 31, 2019, Wan Feng Investment owned 480,000,000 shares, representing 75% of the total equity[73] - The company has established a concert party agreement among its major shareholders to ensure unified management and operational control[70] Audit and Financial Reporting - The company’s financial statements for the year ended December 31, 2019, were audited by Deloitte[43] - The external auditor for the group is Deloitte, with audit fees amounting to HKD 1,200,000 and non-audit service fees of HKD 400,000 for the six months ending June 30, 2019[194] - The board is responsible for the preparation of the consolidated financial statements in accordance with applicable accounting standards[186] Communication and Disclosure - The company emphasizes the importance of communication with shareholders, providing detailed operational and financial performance information through annual and interim reports[196] - The company has established a continuous disclosure policy to enhance disclosure procedures and provide training to relevant personnel[191] - The company has a dedicated website that is regularly updated to provide investors with the latest information[196]

Financial Proceeds Utilization - The net proceeds from the share sale amounted to approximately HKD 147.0 million[2] - As of December 31, 2018, HKD 140.1 million had been utilized for purchasing production machinery and equipment to enhance capacity and efficiency[2] - The remaining balance as of December 31, 2018, was HKD 9.2 million[2] - The company plans to utilize HKD 3.2 million for participating in overseas and China fabric exhibitions to strengthen market penetration and expand the customer base by the end of 2020[2] - An additional HKD 3.7 million is allocated for general working capital and other corporate purposes, expected to be utilized by the end of 2020[2] - The total expected utilization of the remaining proceeds is projected to be completed by the end of 2020[2] - All unutilized proceeds are currently deposited in a bank located in Hong Kong[4] Product Development and Market Expansion - The company aims to enhance its product development capabilities through the acquisition of machinery and equipment[2] - The company has not disclosed any new product or technology developments in the current report[4] - There are no updates on market expansion or mergers and acquisitions in the current report[4]

Revenue Performance - Revenue for the first half of 2019 decreased by approximately 29.0% to HKD 271.96 million, compared to HKD 383.18 million in the same period of 2018[7] - Revenue for the six months ended June 30, 2019, was HKD 271,962,000, a decrease of 29.2% compared to HKD 383,181,000 for the same period in 2018[54] - Total revenue for the six months ended June 30, 2019, was HKD 271,962,000, a decrease of 29.1% compared to HKD 383,181,000 for the same period in 2018[109] - Revenue from elastic blended denim fabric was HKD 237,150,000, down 31.2% from HKD 344,782,000 in the previous year[109] - The main revenue source, elastic blended denim, accounted for 87.2% of total revenue, generating HKD 237.2 million, down from HKD 344.8 million in the first half of 2018[8] Profitability - Gross profit for the first half of 2019 was HKD 68.41 million, with a gross margin of 25.2%, down from HKD 123.77 million and 32.3% in the first half of 2018[4] - The company reported a profit attributable to owners of HKD 13,537,000, a decline of 76.5% from HKD 57,463,000 in the previous year[54] - Basic earnings per share decreased to HKD 2.12 from HKD 11.97, representing a drop of 82.3%[54] - For the six months ended June 30, 2019, the pre-tax profit was HKD 20,302,000, a decrease of 70.6% compared to HKD 68,973,000 for the same period in 2018[65] - The company paid dividends of HKD 12,800,000, a decrease of 82.3% compared to HKD 72,459,000 in the previous year[67] Financial Position - Cash and cash equivalents as of June 30, 2019, were approximately HKD 166.7 million, down from HKD 185.1 million at the end of 2018[11] - As of June 30, 2019, the net current assets were approximately HKD 299.2 million, a decrease from HKD 311.4 million as of December 31, 2018[18] - Total assets as of June 30, 2019, were HKD 492,433,000, down from HKD 543,225,000 at the end of 2018[57] - Current liabilities decreased to HKD 193,246,000 from HKD 231,781,000, indicating a reduction of 16.6%[57] - The bank balance and cash, along with restricted bank deposits, amounted to approximately HKD 170.7 million as of June 30, 2019, down from HKD 189.2 million as of December 31, 2018[18] Capital and Investments - The company raised approximately HKD 147.0 million from its initial public offering, with HKD 9.2 million allocated for the purchase of a denim pre-shrinking machine[17] - The company has a capital commitment of HKD 25.4 million for the acquisition of a yarn dyeing machine as of June 30, 2019[25] - The group reported capital expenditure contracted but not provided for in the financial statements amounted to HKD 25,400,000 as of June 30, 2019[144] - The company acquired production equipment worth approximately HKD 15,311,000 during the interim period to enhance production capacity[124] Market Strategy and Outlook - The company plans to enhance its competitiveness by expanding its business in Europe and China, participating in more trade shows, and collaborating with local fashion designers[13] - The company aims to develop innovative elastic blended denim and eco-friendly products, utilizing funds raised from its listing to purchase new equipment for increased production capacity[12] - The company is exploring market expansion opportunities in Southeast Asia, targeting a 25% increase in market share within the next two years[147] - The company provided a positive outlook for the next quarter, projecting a revenue growth of 10% to 12% based on current market trends[147] - New product development is underway, with plans to launch two innovative textile products by Q3 2019, expected to enhance market competitiveness[147] Governance and Ownership - Wan Fung Investment holds 75% of the issued shares, making it the controlling company of the firm[41] - The beneficial ownership structure includes Mr. Dong Xinkang, Mr. Dong Weiting, and Mr. Dong Zhuoming, each holding significant stakes[42] - The company has established a clear governance structure with defined ownership percentages among key stakeholders[42] - All directors are considered beneficial owners of 480,000,000 shares, representing 75% ownership in the company[41] Compliance and Risk Management - Compliance and regulatory measures are being strengthened to ensure adherence to industry standards and practices, with a focus on risk management[148] - The company is committed to enhancing shareholder value through consistent dividend payments, with a proposed increase of 5% in the upcoming fiscal year[147] Employee and Operational Metrics - The company had 483 employees as of June 30, 2019, an increase from 458 employees as of December 31, 2018[20] - The total compensation for directors and key management personnel was HKD 8,224,000 for the six months ended June 30, 2019, compared to HKD 9,018,000 for the same period in 2018[139] Financial Changes and Accounting Policies - The company adopted the Hong Kong Financial Reporting Standard 16, resulting in significant accounting policy changes[82] - The company recognized a lease liability of HKD 11,831,000 as of January 1, 2019, with current and non-current portions of HKD 5,975,000 and HKD 5,856,000 respectively[104] - The right-of-use assets recognized under HKFRS 16 amounted to HKD 32,424,000, which includes HKD 5,969,000 related to operating leases[101]

HINGTEX HOLDINGS LIMITED 興 紡 控 股 有 限 公 司 (於開疊群島註冊成立的有限公司) 股份代號 : 1968 . 年報 201 ● ● ● . ● . 目錄 2 主席報告書 4 管理層討論及分析 6 董事及高級管理層 8 董事會報告 23 企業管治報告 33 獨立核數師報告 38 綜合損益及其他全面收益表 39 綜合財務狀況表 41 綜合權益變動表 . o t 201 ● 42 綜合現金流量表 t and on the comments of 44 綜合財務報表附註 .... 120 財務概要 One of the st 121 公司資料 ... . . . . . . 主席報告書 本人謹代表董事會提呈截至二零一八年十二月三十一日止年度（「本年度」）的經營業績。 過去一年，主要經濟體系特別是中華人民共和國（「中國」）與美國（「美國」）相互實施貿易關稅，貿易增長動力隨後 減弱，致使全球經濟增長步伐放緩，從而嚴重影響我們的客戶，該等客戶大部分為美國的品牌擁有人（「品牌擁有 人」）。雖然興紡於本年度內繼續受益於牛仔布市場的強烈需求，我們的客戶為避免可能產生額外的貿易關稅，而 將已完成生 ...