Financial Performance - Total revenue for the year ended December 31, 2023, decreased by approximately 33.6% to HKD 162.9 million, compared to HKD 245.2 million for the year ended December 31, 2022[5] - The net loss attributable to shareholders for the year ended December 31, 2023, was approximately HKD 37.8 million, compared to a net loss of approximately HKD 50.0 million for the year ended December 31, 2022[5] - Basic loss per share for the year ended December 31, 2023, was HKD 5.91, compared to HKD 7.81 for the year ended December 31, 2022[5] - The total revenue for the year ending December 31, 2023, was HKD 162,884,000, a decrease of 33.4% compared to HKD 245,176,000 for the year ending December 31, 2022[28] - The group reported a revenue of HKD 162.9 million for the year, down from HKD 245.2 million in the previous year, representing a decrease of approximately 33.4%[76] Profitability and Gross Margin - Gross profit for the year ended December 31, 2023, was HKD 21.7 million, an increase from HKD 18.9 million for the year ended December 31, 2022[5] - Gross profit increased by 15% to HKD 21.7 million, compared to HKD 18.9 million in the previous year, resulting in a gross margin of 13.3% (up from 7.7%)[76] Assets and Liabilities - Total assets as of December 31, 2023, were valued at HKD 284.6 million, down from HKD 326.0 million as of December 31, 2022[7] - Current assets as of December 31, 2023, totaled HKD 190.6 million, compared to HKD 230.9 million as of December 31, 2022[7] - Current liabilities as of December 31, 2023, were HKD 58.6 million, a decrease from HKD 68.4 million as of December 31, 2022[7] - The net asset value decreased to HKD 275,672,000 from HKD 313,472,000 year-over-year, reflecting a decline of 12.1%[13] - The total non-current liabilities decreased to HKD 8,928,000 from HKD 12,528,000, indicating a reduction of 28.5%[13] Cash Flow and Financing - As of December 31, 2023, cash and cash equivalents decreased by HKD 24.0 million to HKD 60.7 million, compared to HKD 84.7 million in 2022, primarily due to unsatisfactory operating performance[34] - The available bank financing as of December 31, 2023, was HKD 72.3 million, significantly lower than HKD 163.4 million in 2022[22] - The bank borrowings as of December 31, 2023, were approximately HKD 29.0 million, down from HKD 31.4 million in 2022[22] - The group’s bank borrowings had a floating annual interest rate of 6.7% to 6.9% as of December 31, 2023, an increase from 5.4% to 5.9% in 2022[112] Operational Highlights - The group is focusing on developing new types of elastic blended fabrics to meet changing customer demands[21] - The group plans to enhance production capacity and product quality by importing two large dyeing machines from Germany and Italy, expected to be operational by the end of 2024[56] - The group has established a partnership with a Vietnamese denim manufacturer to support production needs[55] - The group is responding to increasing demand for sustainable materials by integrating certified recycled materials into its products[54] Employee and Cost Management - The total employee benefits expense amounted to HKD 47.173 million, down from HKD 49.601 million in 2022[45] - The group employed 317 staff as of December 31, 2023, a decrease from 353 staff in the previous year[87] - The group has implemented strict cost control measures and various cost-saving practices in operations[103] Market and Sales Performance - Revenue from elastic blended denim fabric accounted for 85.9% of total revenue in 2023, slightly down from 86.0% in 2022[54] - The business development of the group remained sluggish for most of the year, primarily due to lockdown measures implemented in Shanghai, China, in Q2 2022 due to COVID-19, leading to a decrease in overall sales[103] - The group successfully secured orders from long-term customers, with products sold at the largest retail chain in the United States by the end of the year, enhancing its market position and overall profit margins[103] Dividends and Financial Recommendations - The group has no plans to declare dividends for the current year, consistent with the previous year[19] - The board does not recommend the payment of any dividends for the year ended December 31, 2023[99] Taxation - The company reported no provision for Hong Kong profits tax due to tax losses carried forward[125] - The company has not reported any taxable profits in Hong Kong for the year ended December 31, 2022[125]

Financial Performance - The group's revenue for the six months ended June 30, 2023, was approximately HKD 92.6 million, a decrease of 35.3% compared to HKD 142.8 million for the same period in 2022[14]. - The gross profit for the same period was HKD 12.4 million, resulting in a gross margin of 13.4%, up from 8.6% in the previous year[14]. - The pre-tax loss narrowed to HKD 22.9 million from HKD 28.1 million year-on-year[14]. - The net loss attributable to the company's owners was HKD 19.5 million, compared to HKD 24.7 million in the prior year[14]. - Revenue for the six months ended June 30, 2023, was HKD 92,551,000, compared to HKD 142,842,000 for the same period in 2022, representing a decrease of approximately 35%[47]. - Gross profit for the same period was HKD 12,357,000, slightly up from HKD 12,222,000 in 2022, indicating a marginal increase of about 1%[47]. - The company reported a loss before tax of HKD 22,880,000 for the six months ended June 30, 2023, an improvement from a loss of HKD 28,099,000 in the previous year, reflecting a reduction of approximately 18%[47]. - The net loss attributable to shareholders for the period was HKD 19,459,000, compared to HKD 24,749,000 in 2022, showing a decrease of about 21%[47]. - The company reported a loss of HKD 19,459,000 for the six months ended June 30, 2023, compared to a loss of HKD 24,749,000 for the same period in 2022, reflecting an improvement of approximately 21%[83]. Cash and Liquidity - The group's cash and bank balances as of June 30, 2023, were approximately HKD 81.6 million, down from HKD 84.7 million at the end of 2022[3]. - Cash and cash equivalents decreased by HKD 2,863,000 for the six months ended June 30, 2023, compared to a decrease of HKD 20,624,000 for the same period in 2022, showing a significant reduction in cash outflow[67]. - The company raised new bank borrowings of HKD 31,000,000 during the six months ended June 30, 2023, compared to HKD 61,405,000 in the same period of 2022, indicating a decrease of about 49%[67]. - As of June 30, 2023, bank borrowings were approximately HKD 27.5 million, down from HKD 31.4 million at the end of 2022, with available bank financing at HKD 65.5 million compared to HKD 163.4 million previously[126]. - The company’s total non-current liabilities decreased to HKD 8,607,000 as of June 30, 2023, from HKD 12,528,000 as of December 31, 2022, a reduction of approximately 31%[59]. Assets and Liabilities - Total non-current assets as of June 30, 2023, were valued at HKD 159,539,000, down from HKD 163,548,000 at the end of 2022, indicating a decrease of about 2.4%[49]. - Current assets totaled HKD 214,558,000, a decrease from HKD 230,869,000 in the previous year, representing a decline of approximately 7%[49]. - The company's total assets less current liabilities amounted to HKD 302,620,000, down from HKD 326,000,000, reflecting a decrease of about 7.1%[49]. - The company’s net asset value as of June 30, 2023, was HKD 294,013,000, down from HKD 313,472,000 as of December 31, 2022, indicating a decrease of about 6.2%[59]. - The company’s reserves decreased from HKD 307,072,000 as of December 31, 2022, to HKD 287,613,000 as of June 30, 2023, reflecting a decline of about 6.3%[59]. Operational Efficiency - Employee benefits expenses capitalized as manufacturing inventory costs totaled HKD 19.8 million, down from HKD 26.6 million in the prior year[22]. - The company maintained a minimum workforce due to lower business volume, with 323 employees as of June 30, 2023, down from 353 employees at the end of 2022[128]. - The company experienced a decrease in inventory by HKD 14,670,000, compared to a decrease of HKD 15,291,000 in the prior period, indicating a stable inventory management[182]. - The operating cash flow before changes in working capital was a negative HKD 15,418,000, slightly better than the negative HKD 16,641,000 recorded in the previous period[182]. - The company reported a net cash inflow from operating activities of HKD 4,986,000, a recovery from a net outflow of HKD 7,288,000 in the prior period[182]. Market and Product Focus - The company is focusing on the US market due to a stable increase in order volume and is actively participating in denim exhibitions to expand its customer base[116]. - The main product remains elastic blended denim, accounting for 85.7% of total sales, slightly up from 85.5% in the previous year[116]. - The company is focusing on increasing sales by enhancing customer engagement and negotiating for more product shipments, particularly in the U.S. denim market, which is expected to grow at a CAGR of 4.5% until 2028[120]. - For the six months ended June 30, 2023, the revenue from elastic blended denim fabric increased to HKD 122.235 million from HKD 79.332 million in the same period of 2022, representing a growth of approximately 54.1%[200]. - The revenue from elastic cotton denim fabric rose to HKD 13.581 million, compared to HKD 7.925 million in the prior year, reflecting a growth of approximately 71.8%[200]. Strategic Initiatives - The company has implemented cost-saving measures since the second half of 2022 to strengthen its financial health[116]. - The company is actively pursuing diversification of its business portfolio, including property investments in Tsuen Wan, Hong Kong, which have shown promising tenant interest and increased foot traffic[121]. - The company plans to utilize proceeds from its IPO to acquire advanced dyeing and finishing equipment to enhance operational performance[121]. - The company is committed to developing flexible mixed denim fabrics that adapt to innovative designs while ensuring comfort and style for wearers[121]. - The company is planning to list its shares on the main board of the Hong Kong Stock Exchange, indicating a strategic move for market expansion[158]. Accounting and Reporting - The company has adopted accounting standards in accordance with Hong Kong Accounting Standard 34 for the preparation of interim financial reports[187]. - The application of the revised Hong Kong Financial Reporting Standards did not have a significant impact on the group's financial position and performance during the interim period[196]. - The group confirmed deferred tax assets and liabilities related to lease liabilities and associated assets in accordance with Hong Kong Accounting Standard 12[197]. - The company has maintained the same accounting policies and calculation methods for the interim financial statements as those used for the annual financial statements for the year ended December 31, 2022[194]. - The group has not identified any major impacts on disclosures in the interim financial statements due to the application of the revised standards[196].

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。 HINGTEX HOLDINGS LIMITED 興 紡 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1968） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 中 期 業 績 公 告 • 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 的 收 益 總 額 同 比 減 少 約 35.21%至92.6百萬港元，而截至二零二二年六月三十日止六個月的 收益總額則為142.8百萬港元。 • 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月，本 公 司 擁 有 人 應 佔 淨 虧 損 為約19.5百萬港元，而截至二零二二年六月三十日止六個月的虧損 淨額為約24.7百萬港元。 • 截至二零二三年六月三十日止六個月的每股基本虧損為3.04港仙， 而截至二零二二年六月三十日止六個月的每股基本虧損為3.87港仙。 興紡控股有限公司（「本公司」）董事 ...

Financial Performance - For the fiscal year ended December 31, 2022, the company's revenue decreased to HKD 245.2 million from HKD 363.0 million in 2021, representing a decline of approximately 32.5%[19] - Gross profit for the same period was HKD 18.9 million, down from HKD 65.4 million in 2021, resulting in a gross margin of 7.7% compared to 18.0% in the previous year[19] - The company reported a pre-tax loss of HKD 55.1 million, significantly higher than the pre-tax loss of HKD 12.0 million in 2021[12] - Operating cash flow before changes in working capital was negative HKD 36.2 million, compared to positive HKD 7.5 million in the previous year[9] - The company reported a total loss and comprehensive expenses of HKD 49.962 million for the year[42] - The company's available distributable reserves as of December 31, 2022, amounted to approximately HKD 118,941,000[66] - The net asset value of the company decreased to HKD 313,472,000 in 2022 from HKD 363,434,000 in 2021, a decline of 13.8%[71] - The company's total equity attributable to owners remained stable at HKD 313,472,000 in 2022, unchanged from the previous year[71] - The company did not declare any dividends for the year, indicating a focus on retaining earnings[63] Assets and Liabilities - Cash and cash equivalents decreased from HKD 119.9 million in 2021 to HKD 84.7 million in 2022[21] - As of December 31, 2022, the company's current assets net value was approximately HKD 162.5 million, down from HKD 225.9 million in 2021[53] - Non-current liabilities increased to HKD 12,528,000 in 2022 from HKD 10,399,000 in 2021, representing a growth of 10.9%[71] - The company's capital and reserves showed a decrease in retained earnings from HKD 216,073,000 in 2021 to HKD 216,073,000 in 2022, indicating no growth in this area[80] - The company reported a total of HKD 1,165,000 in other payables, down from HKD 1,704,000 in the previous year, a decrease of 31.6%[71] - The company’s lease liabilities increased significantly to HKD 3,431,000 in 2022 from HKD 540,000 in 2021, marking a substantial rise of 535.4%[71] - Deferred tax liabilities decreased slightly to HKD 7,932,000 in 2022 from HKD 8,155,000 in 2021, a reduction of 2.8%[71] - Current assets decreased significantly to HKD 230,869 million in 2022 from HKD 356,126 million in 2021, a decline of 35.1%[104] - Total current liabilities decreased to HKD 68,417 million in 2022 from HKD 130,179 million in 2021, a reduction of 47.5%[104] - The total asset value minus current liabilities stands at HKD 326,000 million, compared to HKD 373,833 million in 2021, a decline of 12.8%[104] Operational Challenges and Future Outlook - The company faced significant operational challenges due to the COVID-19 lockdowns in Shanghai, impacting production capacity and order volumes[19] - The company plans to continue developing new products using existing yarn inventory to meet the increasing demand for sustainable materials from brand owners[20] - The company anticipates a gradual recovery in global economic conditions, leading to increased production due to higher customer orders[23] - The company expects steady sales recovery as 2023 progresses, with projections indicating the global denim market could reach USD 87.4 billion by 2027[49] - The company continues to review opportunities to enhance overall performance amidst a challenging economic environment[22] Corporate Governance and Compliance - The board of directors has not approved any contracts for overall business management or significant administrative work during the year[122] - The company continues to comply with public shareholding requirements as stipulated by listing rules[123] - The board of directors consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring independent oversight[129] - The independent non-executive directors have confirmed compliance with the non-competition agreement established in the company's prospectus published on June 28, 2018[143] - The audit committee is composed of three independent non-executive directors, with a chairman possessing professional qualifications and experience in accounting and finance[162] - The company has established three board committees: the audit committee, the remuneration committee, and the nomination committee, each with clear written terms of reference[161] - The consolidated financial statements for the year ended December 31, 2022, were audited by Deloitte, who will be re-elected at the upcoming annual general meeting[148] - The company has complied with relevant laws and regulations in Hong Kong and China throughout the year[139] - The board confirmed that the risk management and internal control systems are adequate and effective, ensuring compliance with corporate governance codes[174] Management and Development - The company is focused on research and development to seize significant market opportunities for sustainable long-term growth[23] - The company plans to leverage its technological advantages and market position to expand its business further[23] - The company encourages all directors to participate in continuous professional development to enhance their knowledge and skills[157] - The board meets at least four times a year to discuss significant events and issues, ensuring timely communication of the group's latest developments[152] - The board retains final decision-making authority on significant matters, including policies, strategies, and major transactions[179] - The external auditor participated in discussions regarding audit, internal control, and financial reporting matters[189] - The board's leadership and management responsibilities are delegated to the management team for daily operations and strategy execution[177] - The audit committee reviews the group's risk management and internal control systems biannually to ensure they are adequate and effective, covering all significant control activities[200] - The board identified significant risks to the group this year and developed corresponding risk management solutions based on the group's risk tolerance[200]

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。 HINGTEX HOLDINGS LIMITED 興 紡 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1968） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 全 年 業 績 公 告 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 總 收 益 同 比 減 少 約32.5%至 245.2百 萬 港 元，而 截 至 二 零 二 一 年 十 二 月 三 十 一 日 止 年 度 的 總 收 益 則 為363.0百萬港元。 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度，本 公 司 擁 有 人 應 佔 虧 損 淨 額 為約50.0百萬港元，而截至二零二一年十二月三十一日止年度的虧損淨 額為約11.9百萬港元。 截至二零二二年十二月三十一日止年度的每股基本虧損為7.81港仙，而 截至二零二一年十二月三十一日止年度則為每股基 ...

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]