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 ...