Financial Performance - For the first half of the fiscal year 2023, the company reported revenue of HKD 3,099.4 million, reflecting a growth of 11.0% compared to the previous year[12]. - The gross profit for the same period was HKD 527.6 million, with a gross margin of 17.4%[15]. - The profit attributable to the owners of the company was HKD 270.9 million, representing an increase of 18% year-on-year[16]. - The adjusted net profit for the first half of the fiscal year was HKD 342.9 million, with an adjusted net profit margin of 11.1%[17]. - The company's revenue for the first half of the 2023 fiscal year increased by 26.4% to HKD 3,099.4 million compared to the same period in 2022[23]. - Net profit rose by 25.6% to HKD 255.1 million, while adjusted net profit surged by 78.9% to HKD 342.9 million, with an adjusted net profit margin increasing from 7.8% to 11.1%[27]. - Revenue for the six months ended September 30, 2022, was HKD 3,099,367, an increase of 26.4% compared to HKD 2,452,469 in 2021[180]. - Gross profit for the same period was HKD 516,400, representing a gross margin of 16.7%[180]. - Operating profit increased to HKD 320,470, up 31.5% from HKD 243,659 in the previous year[180]. - The company reported a profit attributable to owners of HKD 232,848,000 for the period, compared to HKD 203,075,000 in the previous year, marking an increase of about 14.6%[197]. Market Conditions - The company experienced a temporary rebound in consumer sentiment due to the easing of social distancing measures in key markets such as Japan, the United States, and Europe[21]. - The ongoing geopolitical tensions and inflationary pressures have impacted global economic conditions, affecting consumer spending[21]. - The company anticipates continued uncertainty in the global market due to rising interest rates and fluctuating raw material prices, prompting a cautious approach[28]. Manufacturing and Operations - The company’s manufacturing facility in Vietnam has fully resumed production, allowing it to meet customer demands during lockdowns in various cities in mainland China[21]. - The company aims to diversify risks by maintaining manufacturing capabilities in both mainland China and Vietnam[21]. - The company plans to enhance productivity at its Vietnam manufacturing base and expand customer service functions in response to increasing demand[28]. - The company is focused on integrating renewable energy into its production facilities to improve energy efficiency and support environmental protection initiatives[31]. - The company aims to increase its overseas production ratio to adapt to changing customer procurement preferences, particularly in light of trade tensions between China and the U.S.[31]. Sales and Pricing - The average selling price of men's and women's knitted products rose by 23.3% to HKD 136.2 per piece, with total sales volume increasing to 18.7 million pieces[23]. - Sales of men's and women's knitted products rose by 4.5% in volume from 17.9 million pieces to 18.7 million pieces, with the average selling price increasing by 23.3% from HKD 110.5 to HKD 136.2 per piece[40]. Income and Expenses - The company has experienced a significant increase in other income, primarily from the sale of upgraded machinery and foreign exchange gains[26]. - Other income rose from HKD 13.1 million to HKD 29.6 million, mainly due to an increase in insurance claims and government subsidies[44]. - Selling and distribution expenses slightly increased from HKD 23.3 million to HKD 23.7 million, mainly due to rising transportation costs[46]. - General and administrative expenses decreased from HKD 169.9 million to HKD 168.4 million, reflecting ongoing cost control measures despite business expansion[47]. Impairment and Valuation - The impairment loss for the Myanmar production base amounted to HKD 109.0 million due to a reassessment of business development prospects amid economic challenges[48]. - The company engaged an independent valuation firm to assess the recoverable amount of the Myanmar cash-generating unit, leading to the recognition of the impairment loss[52]. - The company’s valuation as of September 30, 2022, using the income approach, was HKD 298.4 million, down from HKD 429.6 million as of March 31, 2022[54]. Cash Flow and Financing - The net cash generated from operating activities for the six months ended September 30, 2022, was HKD 168.4 million, compared to a net cash used of HKD 166.9 million for the same period in 2021[73]. - The company’s investment activities generated a net cash inflow of HKD 28.9 million, primarily from the sale of properties, plants, and equipment[74]. - As of September 30, 2022, the net cash used in financing activities was HKD 26.8 million, primarily due to dividend payments of HKD 34.2 million, partially offset by an increase in bank borrowings and lease liabilities of HKD 6.2 million[75]. - The company incurred a net cash outflow from investing activities of HKD 28,876,000, a significant improvement from HKD 56,569,000 in the prior year, indicating better capital management[200]. Shareholder Information - The company declared an interim dividend of HKD 0.051 per share for the six months ended September 30, 2022, compared to HKD 0.042 per share in 2021, representing a 21.4% increase[108]. - Major shareholder South旋 Investment Limited holds 1,500,000,000 shares, accounting for 65.81% of the issued share capital[131]. - The total number of ordinary shares issued as of September 30, 2022, is 2,279,392,000 shares[125]. Governance and Compliance - The board of directors emphasizes high-quality governance and compliance with corporate governance codes, maintaining adherence to all mandatory provisions as of September 30, 2022[109]. - The company’s audit committee consists of three independent non-executive directors, responsible for overseeing financial reporting and internal controls[112].

Financial Performance - For the fiscal year 2022, the total export value of China's knitting industry increased by 23.1% compared to the previous fiscal year, with a significant growth of 36.4% in the export value of knitted products [15]. - Vietnam's textile and apparel export value reached a ten-year high, growing by 14.5% compared to the previous fiscal year, as the country gradually lifted COVID-19 restrictions [16]. - In FY2022, the sales volume of men's and women's knitted products decreased by 6.5% to 29.0 million pieces compared to the previous fiscal year [19]. - The average selling price of men's and women's knitted products increased by 1.8% to HKD 110.4 per piece, despite a slight decline in high-priced cashmere sweater sales [19]. - Total revenue for FY2022 grew by 5.0% to HKD 4,040.5 million, driven by increased sales of cashmere yarn and fabrics [19]. - Operating profit decreased by 7.7% to HKD 339.4 million due to increased costs related to COVID-19 measures and new fabric business [20]. - Net profit for FY2022 slightly declined by 7.6% to HKD 275.6 million, with a net profit margin dropping from 7.8% to 6.8% [20]. - The company's revenue increased by 5.0% from HKD 3,848.6 million in 2021 to HKD 4,040.5 million in 2022, primarily due to higher sales of cashmere yarn [29]. - The gross profit for 2022 was HKD 706.1 million, with a gross margin of 17.5%, down from HKD 701.4 million and 18.2% in 2021 [32]. - The company reported a net profit of HKD 275.6 million for 2022, down from HKD 298.4 million in 2021 [28]. Strategic Management - The company maintained a strategic presence in both China and Vietnam, which facilitated effective management during turbulent macroeconomic conditions [16]. - The company emphasized the importance of flexible production management to adapt to the unstable situations in Vietnam and China, optimizing strategies in collaboration with customers [16]. - The management team responded quickly to challenges posed by the COVID-19 pandemic, minimizing negative impacts on the company's operations [11]. - The company aims to adapt to rapidly changing market conditions by collaborating with ethically and financially sound customers and suppliers [15]. - The production capacity at the Vietnam facility is expected to exceed that of the mainland China facility in the coming year, aligning with the strategy to increase overseas production [22]. - The company is focused on innovation and product development to meet rapidly changing customer preferences, despite facing challenges in the market [23]. - The company is exploring new market opportunities and strategies for expansion, leveraging its existing resources and expertise [79]. Corporate Governance - The board consists of four executive directors and four independent non-executive directors, ensuring compliance with listing rules [104]. - The company has maintained high standards of corporate governance, adhering to all mandatory provisions of the corporate governance code [99]. - The board of directors confirmed compliance with the corporate governance code regarding continuous professional development, with all directors participating in relevant training courses [128]. - The company emphasizes the importance of timely communication and transparency with shareholders and investors as a key part of good corporate governance [129]. - The company provides directors and senior management with liability insurance for legal actions arising from corporate activities [127]. - The company encourages active participation from directors in board matters, providing sufficient information for informed decision-making [109]. Risk Management - The company identifies significant risk areas and takes appropriate measures to manage and mitigate these risks, improving its business operations [135]. - The risk management framework follows a "three lines of defense" model, involving operational management, risk management functions, and internal audit mechanisms [137]. - The company faces significant risks from uncontrollable factors such as US-China trade policies, international political environment, and exchange rate fluctuations, which may increase downward risks [150]. - The company has adopted measures to strengthen its internal control system and ensure compliance with applicable laws and regulations, including regular training for employees on social security and housing fund responsibilities [152]. Market Expansion - The company is expanding its cashmere yarn production in China, weaving and dyeing fabric production in Vietnam, and establishing a new knitting product production base in Myanmar to diversify revenue and customer base [151]. - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years [90]. - A strategic acquisition of a local competitor is anticipated to enhance operational efficiency and increase customer base by 30% [86]. Sustainability Initiatives - The management team emphasized the importance of sustainability initiatives, aiming for a 50% reduction in carbon footprint by 2025 [88]. - Sustainable materials are being incorporated into product development to enhance environmental protection [96]. Shareholder Engagement - The company aims to distribute at least 35% of distributable profits to shareholders, subject to certain limitations and conditions [171]. - The company encourages shareholders to attend annual general meetings to directly query the board [131].

南旋控股有限公司 Nameson Holdings Limited (於開曼群島註冊成立的有限公司) 股份代號 : 1982 中期報告 20 | --- | --- | --- | --- | |----------------------------------------|---------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 資 料 摘 要 報 告 層 討 論 及 分 析 錄 | 2 4 5 8 | | | | 資 料 | 1 7 | | | | 綜 合 全 面 收 入 表 | 2 7 | | | | 綜 合 資 產 負 債 表 | 2 9 | | | | 綜 合 權 益 變 動 表 | 3 1 | | | | 綜 合 現 金 流 量 表 | 3 2 | | | | 綜 合 中 期 財 務 資 料 附 註 | 3 3 | | | | | | | | 目 公司資料 | --- | --- | |---------------------------------------------- ...

Market Impact and Performance - In the fiscal year 2021, the overall market was significantly impacted by the COVID-19 pandemic, with China's total export value increasing by 41.1%[12] - Despite challenges, the sales volume of men's and women's knitted products decreased by 10.1% to 31.0 million pieces in fiscal year 2021[13] - The export value of China's knitted products recorded a decline of 3.5% in fiscal year 2021, despite significant growth in the second half of the year due to other Southeast Asian countries facing intensified COVID-19 outbreaks[12] - Vietnam's textile and apparel exports experienced an 8.5% decline in fiscal year 2021, marking the first drop in twenty years, yet production continued to grow as expected[12] - Total revenue decreased by 14.1% from HKD 4,480.7 million to HKD 3,848.6 million in the fiscal year 2021[16] - The group's revenue decreased by 14.1% from HKD 4,480.7 million for the year ended March 31, 2020, to HKD 3,848.6 million for the year ended March 31, 2021, primarily due to a decline in sales of men's and women's knitted products[25] Financial Performance - Gross profit increased by 1.6% to HKD 701.4 million, with a gross margin improvement from 15.4% to 18.2%[16] - Operating profit surged by 55.5% to HKD 367.6 million, with an operating margin increase from 5.3% to 9.6%[17] - Profit attributable to shareholders rose by 99.8% to HKD 313.7 million, with adjusted net profit growth of 25.2% to HKD 305.5 million[17] - Adjusted net profit rose from HKD 244.0 million for the year ended March 31, 2020, to HKD 305.5 million for the year ended March 31, 2021, with an adjusted net profit margin increasing from 5.4% to 7.9%[47] - Financial costs decreased due to lower market interest rates and prudent cash management[17] Operational Efficiency and Strategy - The company focused on balancing employee health risks while managing production layouts and adjusting to customer sales plans during the pandemic[13] - The company reported that its efforts to improve operational efficiency contributed to better overall performance despite the pandemic's challenges[13] - The company aims to continue expanding its market presence and exploring new strategies for growth[3] - The company plans to enhance production efficiency in Vietnam to meet customer procurement demands[19] - The company aims to increase its overseas production ratio to adapt to changing customer procurement preferences[19] Risk Management and Challenges - The company faces significant risks from uncontrollable factors such as US-China trade policies, international political environment, and exchange rate fluctuations, which could affect business operations[172] - The ongoing global economic uncertainty post-COVID-19 is expected to severely impact customers' financial and sales situations, directly affecting the company's short to medium-term business and financial conditions[172] - The company acknowledges that rising shipping costs and delays due to global container shortages and changes in shipping methods could adversely affect its business and financial status[173] - The company has identified six categories of risks, including strategic, financial, operational, compliance, external environment, and talent capital, and regularly assesses their potential impact and likelihood[169] Corporate Governance and Management - The company has a strong board of directors with extensive experience in finance, banking, and risk management, including members with over 40 years in the banking sector[91] - The independent non-executive directors bring diverse backgrounds, including government service and legal expertise, enhancing corporate governance[92][93] - The company emphasizes the importance of corporate governance and risk management, as evidenced by the backgrounds of its board members[91][92] - The board's composition reflects a commitment to diversity and inclusion, with members from different professional backgrounds and experiences[92][93] - The company has a structured approach to internal controls and risk management, ensuring accountability to shareholders[110] Community Engagement and Social Responsibility - The group donated over HKD 3 million to non-profit organizations and received various awards for community support, including the InnoESG Award from Society Next Foundation[80] - The group actively engages in community care initiatives, including donations of masks to local schools and support for low-income families in Vietnam[80] - The group’s charitable donations amounted to approximately HKD 3.1 million for the year ending March 31, 2021, compared to HKD 1.4 million in 2020[192] Future Outlook and Growth Plans - The company provided an optimistic outlook for the next quarter, projecting revenue growth of 10% to 12%[100] - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[100] - Market expansion plans include entering three new countries by the end of the fiscal year, targeting a potential market of 10 million users[100] - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[100] Employee Management and Development - The group emphasizes employee training to maintain and enhance expertise in knitted product manufacturing, ensuring continuous development and skill enhancement[77] - The group is committed to providing various employee benefits, including performance-linked bonuses, insurance, and medical coverage[77] - The compensation policy for directors and senior management is based on individual performance and experience, aligned with salary trends in Hong Kong, mainland China, and Vietnam[78]

Financial Performance - For the six months ended September 30, 2020, the company reported a revenue of HKD 2,295 million, a decrease of 14.1% compared to the previous year[26]. - Total revenue decreased by 24.2% to HKD 2,295.1 million for the six months ended September 30, 2020, compared to HKD 3,026.7 million in the same period last year[28]. - The group’s net profit attributable to owners decreased by 12.0% to HKD 238.5 million, while total sales revenue declined by 24.2% due to weakened global demand for knitted products caused by COVID-19[59]. - Net profit decreased by 12.0% to HKD 238.5 million, with a net profit margin improvement to 10.4% from 9.0% in the previous year[32]. - The company reported a net profit of HKD 238,486,000 for the period, compared to a loss of HKD 9,401,000 in the previous period, marking a significant turnaround[172]. - The company reported a total comprehensive income of HKD 202,131 for the period, down from HKD 261,483 in 2019[158]. Profitability Metrics - The gross profit for the same period was HKD 484.2 million, resulting in a gross margin of 21.1%[12]. - Gross profit declined by 17.6%, with a gross margin improvement to 19.0% from 17.4% in the previous year[28]. - Operating profit margin slightly increased to 12.4% from 11.5% year-on-year, despite a decrease in overall sales[32]. - Adjusted net profit decreased from HKD 271.7 million to HKD 235.0 million, but the adjusted net profit margin improved from 9.0% to 10.2%[60]. Sales and Market Trends - Sales volume for men's and women's knitted sweaters was 18.3 million pieces, a decline of 14.1% year-on-year[27]. - The company experienced a 4.6% increase in total exports from China, despite an 18.6% drop in knitted garment exports during the same period[26]. - The overall order situation was impacted by lockdowns in the US and Europe, but sales rebounded significantly after stores reopened in Japan and China[27]. - The company is focusing on market expansion and adapting to new consumer behaviors in response to the COVID-19 pandemic[26]. Cost Management and Efficiency - The company is focusing on managing expenses and optimizing resource allocation amid challenging market conditions[32]. - Selling and distribution expenses decreased from HKD 25.9 million to HKD 20.0 million, reflecting a reduction in sales volume of men's and women's knitted products[52]. - General and administrative expenses decreased from HKD 180.1 million to HKD 158.8 million, mainly due to cost control measures implemented in response to the COVID-19 pandemic[53]. Cash Flow and Liquidity - Cash generated from operating activities for the six months ended September 30, 2020, was HKD 269.8 million, down from HKD 320.1 million in the previous year[63]. - Cash and cash equivalents increased by HKD 93.4 million, compared to an increase of HKD 175.4 million in the same period last year[63]. - The net cash generated from operating activities for the six months ended September 30, 2020, was HKD 269.8 million, primarily due to a profit before tax of HKD 265.5 million, adjusted for inventory reduction of HKD 247.3 million and a decrease in other receivables of HKD 128.9 million[64]. Capital Expenditures and Investments - Capital expenditures for the six months ended September 30, 2020, amounted to approximately HKD 156.5 million, primarily related to machinery procurement and the construction of new production bases in Vietnam and Myanmar[75]. - The net cash used in investing activities for the same period was HKD 146.0 million, mainly for the acquisition of property, plant, and equipment amounting to HKD 147.2 million[65]. Shareholder Information - The board has proposed an interim dividend of HKD 0.038 per share to affirm shareholder support[32]. - The interim dividend declared for the six months ended September 30, 2020, is HKD 0.038 per share, down from HKD 0.043 per share in 2019[95]. - The company’s major shareholder, Mr. Wang Ting Tsung, holds a trust beneficiary interest in 1,500,000,000 shares, representing 65.8% of the issued share capital[108]. Employee and Governance - The company employed approximately 14,600 full-time employees across mainland China, Vietnam, and Hong Kong as of September 30, 2020[91]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange and has complied with all mandatory provisions[96]. - The chairman and CEO roles are held by the same individual, which the board believes is in the best interest of the company[96]. Financial Risks and Management - The group faces various financial risks, including market risk (foreign exchange and cash flow interest rate risk), credit risk, liquidity risk, and price risk[190]. - The group has not made any changes to its risk management policies since March 31, 2020[191]. - The group is currently assessing the impact of newly issued and revised standards, with preliminary conclusions indicating that their adoption is not expected to have a significant impact on the group's operating performance or financial position[186].

Financial Performance - The group's revenue for the fiscal year 2020 increased by 2.8% to HKD 4,480.7 million, despite a decline in overall sales volume of knitted sweaters[14]. - The gross profit rose by 2.6% to HKD 690.1 million, maintaining a gross margin of 15.4%[14]. - Adjusted net profit increased by 7.3% to HKD 244.0 million, with an adjusted net profit margin of 5.4%[16]. - Revenue from the Chinese market grew significantly by 51.3% compared to the previous fiscal year[15]. - The average selling price of knitted products rose by 2.9% to HKD 114.1 per piece, while the sales volume decreased by 6.3% to 34.5 million pieces[22]. - The company reported a profit attributable to owners of HKD 157.0 million for the year ended March 31, 2020, compared to a loss of HKD 298.5 million for the previous year[48]. - The net cash generated from operating activities was HKD 876.3 million, significantly improving from a cash outflow of HKD 8.7 million in the previous year[54]. - The company incurred a net cash outflow of HKD 308.5 million from investing activities, primarily due to the acquisition of property, plant, and equipment amounting to HKD 307.9 million[55]. - The net cash used in financing activities was HKD 265.0 million, attributed to a reduction in bank borrowings and lease liabilities by HKD 194.5 million and dividend payments of HKD 98.0 million[56]. - The effective tax rate for the group was 9.3% for the year ended March 31, 2020, compared to 11.2% for the previous year[45]. Market and Operational Strategy - The company strategically shifted some orders to its Vietnam production base during the COVID-19 pandemic, successfully meeting the shipping requirements for the year[10]. - The company faced temporary disruptions in the supply chain due to COVID-19, but maintained close communication with suppliers to ensure stability in raw material supply[12]. - The company implemented a capacity allocation plan in response to customer procurement preferences, enhancing the utilization rate of its Vietnam production base[10]. - The restructuring of the knitted upper and knitted shoe business was initiated to address business risks posed by the pandemic, despite short-term negative impacts on financial performance[13]. - The company has been proactive in adapting to the changing market conditions due to the ongoing complexities in the US-China trade situation[12]. - The group aims to enhance production efficiency and improve overall profitability through better resource allocation and cost control measures[17]. - The Myanmar production base is expected to commence trial production by the end of the next fiscal year, aiming to expand manufacturing capabilities in Southeast Asia[17]. - The group plans to invest resources in developing weaving and dyeing fabric businesses, anticipating trial production to begin in the coming months[17]. Corporate Governance and Management - The company has a strong leadership team with extensive experience in finance and banking, including over 40 years in the industry for key executives[88][89][90][91][92]. - The board of directors consists of four executive directors, two non-executive directors, and six independent non-executive directors, ensuring a diverse and experienced leadership team[113]. - The company has maintained a focus on independent judgment and governance through its board structure, which includes independent non-executive directors[93][96][97]. - The company encourages directors to actively participate in board matters and seek independent professional advice when necessary[119]. - The company has established a clear framework for risk management to mitigate operational risks[124]. - The nomination committee reviews the board's structure and composition at least annually to ensure a balance of expertise and experience[118]. - The company emphasizes board diversity, monitoring its composition based on various factors including gender, age, and industry experience, with measurable targets set for achieving diversity[132]. Community Engagement and Social Responsibility - The group donated over HKD 1.4 million to multiple non-profit organizations and was recognized as the seventh highest fundraising organization by the Hong Kong Community Chest[81]. - The group contributed one million masks to support local schools in Huizhou and assist the Hong Kong, Macau, and Taiwan communities in pandemic response[82]. - The company has a history of engaging in property investment and development, indicating a strategic interest in real estate markets[96]. - The company is committed to community care, expressing support in various locations including Vietnam and Hong Kong[81]. Risk Management - The company identifies significant risks in its operating environment and assesses their impact on business[152]. - The company has established a risk management framework based on the "three lines of defense" model to manage risks effectively[149]. - The company is experiencing increased risks from cyberattacks, which could impact its operations[165]. - The company acknowledges uncertainties in U.S. trade policies that may adversely affect its operations in China[163]. - The company recognizes the potential impact of global climate change on consumer demand for knitted products[164]. Future Outlook - Future outlook indicates a positive growth trajectory, with strategic plans for market expansion and new product launches[90]. - The company has set ambitious performance guidance for the upcoming fiscal year, aiming for a revenue increase of 15%[90]. - The company is actively investing in new technologies and product development to enhance its competitive edge[90]. - There are ongoing discussions regarding potential mergers and acquisitions to strengthen market position[90]. - The company is focusing on enhancing operational efficiency through strategic initiatives and cost management[90].

Financial Performance - For the six months ended September 30, 2019, the company reported revenue of HKD 3,027 million, a decrease of 2.3% compared to the same period last year[10]. - The gross profit for the same period was HKD 540 million, resulting in a gross margin of 17.8%[10]. - The net profit for the six months was HKD 292.1 million, with a net profit margin of 9.6%[11]. - Adjusted net profit, excluding unrealized gains and losses from derivative financial instruments, was HKD 271.7 million, reflecting a margin of 9.0%[12]. - The group's revenue increased by 5.0% to HKD 3,026.7 million, driven by a rise in average selling prices and increased sales of other knitted products[19]. - Gross profit rose by 6.1% to HKD 527.6 million, with a gross margin of 17.4%, indicating improved operational efficiency despite a challenging business environment[19]. - Net profit increased by 16.0% to HKD 273.8 million, with a net profit margin of 9.0%[20]. - Revenue from the Chinese market surged by 79.2%, while revenues from Japan and North America declined by 16.7% and 5.6%, respectively[19]. - The company reported a net profit of HKD 270,935,000 for the period, compared to a profit of HKD 235,981,000 in the same period last year, representing an increase of approximately 14.8%[131]. - The total comprehensive income for the period amounted to HKD 258,003,000, compared to HKD 112,298,000 in the prior year, reflecting a significant increase of approximately 130%[131]. Market Dynamics - Sales of knitted garments in China decreased during the reporting period, with total exports dropping by 2.3% to USD 50.2 billion[18]. - The company noted a cautious order placement from customers, impacting sales performance in the knitted sweater business compared to the previous year[18]. - The company reported a significant decline in exports to the US, Japan, and Europe, with decreases of 0.4%, 8.7%, and 5.3% respectively[18]. - The textile and garment exports from Vietnam to the US and Japan increased by 9.1% during the same period, indicating a shift in market dynamics[18]. Strategic Initiatives - The company plans to focus on market expansion and new product development to counteract the declining sales in the Chinese market[18]. - The company is expanding its operations in Myanmar and plans to increase production capacity in overseas facilities to meet growing domestic orders[22]. - The company plans to invest in upstream operations and joint ventures with high-quality cashmere producers to enhance production efficiency[22]. - The company aims to diversify its product offerings and expand its customer base to strengthen its market position[22]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[135]. Cost Management - The company is monitoring raw material prices, which have shown signs of stabilization, potentially reducing costs moving forward[18]. - Financial costs increased due to higher interest rates, but the company managed to control other costs effectively[20]. - Sales and distribution expenses decreased from HKD 28.4 million to HKD 25.9 million, aligning with reduced sales of men's and women's knitted products[33]. - General and administrative expenses reduced from HKD 190.5 million to HKD 180.1 million, attributed to cost control measures[34]. - The company incurred financial expenses of HKD 39.0 million for the six months ended September 30, 2019, compared to HKD 28.2 million in the same period of 2018, reflecting an increase of about 38.2%[193]. Cash Flow and Investments - Net cash generated from operating activities was HKD 320.1 million, significantly up from HKD 183.7 million[44]. - Net cash used in investing activities amounted to HKD 170.1 million, primarily for the acquisition of property, plant, and equipment[45]. - Cash and cash equivalents increased by HKD 175.4 million, from HKD 414.8 million to HKD 587.9 million[47]. - The company incurred a net cash outflow from investing activities of HKD 170,076,000, compared to HKD 127,509,000 in the previous year, indicating an increase in investment activities[133]. - Financing activities generated a net cash inflow of HKD 25,306,000, a recovery from a net cash outflow of HKD 251,928,000 in the same period last year[133]. Shareholder Information - The interim dividend declared is HKD 0.043 per share, an increase from HKD 0.036 in 2018, expected to be paid around December 24, 2019[70]. - The total number of ordinary shares issued as of September 30, 2019, was 2,279,392,000 shares[85]. - Major shareholder 南旋投資有限公司 holds 1,500,000,000 shares, representing 65.8% of the company's issued share capital[89]. - Wang Kam Chu holds rights to 1,701,500,000 shares, which is 74.6% of the company's issued share capital, as a spouse of a major shareholder[89]. - The company has a stock option plan approved on January 29, 2016, allowing for a maximum of 200,000,000 shares to be issued upon exercise of options, representing 10% of the issued shares post-listing[95]. Governance and Compliance - The board believes that the dual role of the chairman and CEO held by Mr. Wang is in the best interest of the company, despite a deviation from the corporate governance code[71]. - The audit committee consists of one non-executive director and four independent non-executive directors, responsible for reviewing the financial reporting process and internal controls[75]. - The company has adopted the corporate governance code and has complied with all mandatory provisions except for a specific deviation regarding the roles of chairman and CEO[71]. - All directors confirmed compliance with the standard code for securities trading as of September 30, 2019[73]. - The company emphasizes high-quality governance practices to create value for shareholders[71]. Employee Information - The total employee cost for the six months ended September 30, 2019, was HKD 495.9 million, with approximately 16,200 full-time employees[67]. - Employee benefits expenses, including directors' remuneration, totaled HKD 495.9 million for the six months ended September 30, 2019, slightly down from HKD 504.8 million in the same period of 2018, a decrease of approximately 1.8%[190]. Financial Position - Total assets as of September 30, 2019, amounted to HKD 5,156,484, an increase from HKD 4,623,597 as of March 31, 2019, indicating a growth of about 11.5%[123]. - Total equity as of September 30, 2019, was HKD 2,335,356, compared to HKD 2,046,967 as of March 31, 2019, reflecting an increase of approximately 14%[125]. - Total liabilities as of September 30, 2019, were HKD 2,821,128, compared to HKD 2,576,630 as of March 31, 2019, indicating an increase of about 9.5%[125]. - The company maintained a management control with significant shareholders holding at least 51% of the beneficial ownership[110]. Risks and Accounting Policies - The group faced various financial risks, including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since March 31, 2019[161]. - The company has adopted new accounting standards which may impact future financial reporting but does not expect significant effects on its consolidated financial statements[138].

Financial Performance - In the fiscal year 2019, the total export value of China's knitted garments decreased significantly by 16.5% to $74.6 billion compared to the previous year[16]. - Vietnam's textile and garment export value for the fiscal year 2019 reached $31.2 billion, marking a substantial increase of 16.1% year-on-year[16]. - The group recorded a loss of HKD 300.5 million after accounting for a non-cash impairment of intangible assets amounting to HKD 521.6 million related to the knit upper business[18]. - The company reported a loss attributable to owners of HKD 298.5 million for the year ended March 31, 2019, compared to a profit of HKD 327.0 million for the previous year[48]. - Adjusted net profit decreased from HKD 320.4 million for the year ended March 31, 2018, to HKD 227.4 million for the year ended March 31, 2019, with an adjusted net profit margin dropping from 9.3% to 5.2%[49]. - The group's revenue for the fiscal year 2019 increased by 26.5% to HKD 4,359.1 million, driven by higher sales volume in the knitwear business and a better product mix[18]. - Revenue from the Japanese and Chinese markets grew significantly by 23.3% and 54.8%, respectively[17]. - The overall gross profit decreased by 5.6% to HKD 672.4 million, with a gross margin decline to 15.4% due to rising raw material prices and changes in product mix[18]. - The company's revenue increased by 26.5% from HKD 3,446.4 million for the year ended March 31, 2018, to HKD 4,359.1 million for the year ended March 31, 2019, primarily due to higher average selling prices and increased sales volume of knitted products[25]. - The average selling price of knitted products rose by 13.1% from HKD 98.1 to HKD 111.0 per piece, while the sales volume increased by 7.6% from 34.4 million pieces to 37.0 million pieces[26]. Production and Operations - The utilization rate of the production capacity in Vietnam was improved faster than expected, enhancing production efficiency[15]. - The company has established a fully operational production base in Vietnam, allowing for flexible production planning and allocation for clients[16]. - The overall production costs continued to be under pressure due to the rising prices of raw materials[15]. - The group is expanding its weaving and dyeing fabric production in Vietnam, with a designed capacity of 36 million pounds per year, expected to begin trial production in the second half of the fiscal year 2020[20]. - The group plans to establish a joint venture to open a cashmere yarn factory with a designed capacity of 700 tons per year, expected to start production gradually in the fiscal year 2020[19]. - A new factory is planned to be built in Myanmar, leveraging the experience gained from the successful establishment of the Vietnam production base[19]. - The company aims to provide clients with flexible production arrangements by enhancing design capacity in response to changing procurement trends[15]. - The group aims to enhance product design and material development capabilities while improving production technology and efficiency to boost overall profitability and shareholder returns[20]. Corporate Governance - The company emphasizes the importance of good corporate governance to create value for shareholders[104]. - The board consists of five executive directors, two non-executive directors, and six independent non-executive directors, ensuring a diverse and experienced leadership team[109]. - The company has adopted the corporate governance code and has complied with all mandatory provisions as of March 31, 2019[104]. - The board is responsible for overseeing the management and performance of the company, including financial statements and major transactions[108]. - The company has established various committees to oversee specific functions and responsibilities within the board[108]. - The independent non-executive directors have confirmed their independence based on the criteria set forth in the listing rules[110]. - The company encourages directors to seek independent professional advice when necessary, with costs covered by the company[115]. - The company provides directors and senior management with liability insurance to cover costs arising from legal actions related to corporate activities[131]. Risk Management - The company identifies and assesses significant risks to its business environment and implements necessary measures to manage those risks[149]. - The risk management framework is based on the "three lines of defense" model, involving operational management, risk management functions, and internal audit[146]. - The company has categorized risks into six categories: strategic, financial, operational, compliance, external environment, and talent capital, and regularly assesses their potential impact and likelihood[158]. - The board of directors is responsible for overseeing the effectiveness of the company's risk management and internal control systems, which were deemed adequate and effective for the year ending March 31, 2019[166]. - Increased instances of cyberattacks pose a potential risk to the company's operations[164]. - The company is subject to fluctuations in the USD/CNY exchange rate, which can impact its costs and operating profit margins[163]. Market and Strategic Initiatives - The implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in January 2019 has helped enhance the competitiveness of Vietnam's textile and garment exports[16]. - The company is expanding its market presence in D regions, aiming to capture a larger share of the market[98]. - Recent acquisitions are expected to enhance the company's capabilities and drive future growth, with an estimated contribution of E million in revenue[99]. - The company is investing in R&D, allocating F% of its budget to develop new technologies and improve existing products[94]. - Strategic partnerships are being formed to leverage synergies and enhance competitive positioning in the market[95]. - The company has been recognized for its contributions to labor and community, enhancing its corporate reputation[84]. Financial Position and Cash Flow - The company's net cash position decreased, with excess cash dropping from HKD 96,572,023 in 2018 to HKD 29,930,148 in 2019[38]. - Cash and cash equivalents decreased by HKD 577.4 million, from HKD 1,009.5 million as of March 31, 2018, to HKD 414.8 million as of March 31, 2019[57]. - The net cash used in operating activities for the year ended March 31, 2019, was HKD 8.7 million, primarily due to a pre-tax loss of HKD 275.0 million and an impairment loss of intangible assets of HKD 521.6 million[54]. - The net cash used in investing activities for the year ended March 31, 2019, was HKD 330.2 million, mainly due to the acquisition of property, plant, and equipment amounting to HKD 322.9 million[55]. - The net cash used in financing activities for the year ended March 31, 2019, was HKD 238.5 million, resulting from a net decrease in bank borrowings and finance lease obligations of HKD 247.7 million[56]. - The group's leverage ratio increased from 29.6% as of March 31, 2018, to 42.6% as of March 31, 2019, primarily due to the impairment loss of HKD 521.6 million[58]. Employee and Community Engagement - As of March 31, 2019, the group employed approximately 15,400 full-time employees across China, Vietnam, and Hong Kong, with total employee costs amounting to HKD 919.9 million for the fiscal year[78]. - The group made charitable donations of approximately HKD 2.0 million for the year ended March 31, 2019, down from HKD 2.8 million in 2018[180]. - The company has been recognized as a preferred business partner for clients by improving production allocation between its factories in China and Vietnam[13].