Financial Performance - Revenue for the six months ended September 30, 2024, was HKD 2,786.2 million, representing a 2.2% increase from HKD 2,726.4 million in the same period of 2023[4] - Gross profit increased by 11.1% to HKD 553.5 million, up from HKD 498.0 million year-over-year[4] - Net profit for the period was HKD 312.8 million, a 2.4% increase compared to HKD 305.6 million in the previous year[4] - Adjusted net profit was HKD 298.5 million, reflecting a 3.3% increase from HKD 289.1 million in the same period of 2023[4] - Basic and diluted earnings per share rose to HKD 13.1 cents, up 3.1% from HKD 12.7 cents[4] - Operating profit was HKD 390.4 million, compared to HKD 371.7 million in the same period last year[6] - The company reported a gross margin of 19.9%, an increase of 1.6 percentage points from 18.3% in the previous year[4] - Total revenue increased by 2.2% to HKD 2,786.2 million, driven by growth in cashmere yarn sales and fabric business, with improved gross profit and gross profit margin compared to the same period last year[66] - Operating profit rose by 5.0% to HKD 390.4 million, while net profit reached a historic high of HKD 312.8 million, reflecting a 2.4% increase year-on-year[67] Assets and Liabilities - Total assets as of September 30, 2024, amounted to HKD 4,831.9 million, compared to HKD 4,448.1 million as of March 31, 2024[17] - Total equity increased to HKD 2,796,647 thousand as of September 30, 2024, up from HKD 2,598,959 thousand as of March 31, 2024, representing a growth of 7.6%[19] - Total liabilities rose to HKD 2,035,231 thousand, compared to HKD 1,849,144 thousand in the previous period, indicating an increase of 10.1%[19] - Cash and cash equivalents decreased to HKD 569.0 million from HKD 717.4 million[17] - Trade receivables as of September 30, 2024, amounted to HKD 409,234,000, compared to HKD 167,149,000 as of March 31, 2024, indicating a significant increase[49] - The total bank borrowings as of September 30, 2024, were HKD 788,086,000, a decrease from HKD 807,940,000 as of March 31, 2024[53] - The group's leverage ratio increased from 8.9% as of March 31, 2024, to 14.3% as of September 30, 2024, calculated as net debt divided by total equity[102] Revenue Breakdown - Major customers accounted for approximately 69.1% of total revenue for the six months ended September 30, 2024, down from 72.4% in 2023[35] - Revenue from Japan decreased to HKD 592,102 thousand for the six months ended September 30, 2024, compared to HKD 764,182 thousand in 2023, reflecting a decline of about 22.5%[33] - Revenue from Europe increased significantly to HKD 631,710 thousand for the six months ended September 30, 2024, up from HKD 511,823 thousand in 2023, marking a growth of approximately 23.4%[33] - Revenue from North America increased slightly to HKD 439,339 thousand for the six months ended September 30, 2024, compared to HKD 423,311 thousand in 2023, reflecting a growth of about 3.8%[33] - Revenue from Mainland China was HKD 503,805 thousand for the six months ended September 30, 2024, a decrease from HKD 524,447 thousand in 2023, representing a decline of approximately 3.0%[33] Expenses and Costs - Total cost of sales, selling and distribution expenses, and general and administrative expenses amounted to HKD 2,427,158,000 in 2024, compared to HKD 2,408,435,000 in 2023, an increase of approximately 0.8%[39] - Advertising and promotional expenses decreased to HKD 3,233,000 in 2024 from HKD 4,579,000 in 2023, a reduction of approximately 29.4%[39] - Employee benefits expenses, including director remuneration, increased to HKD 544,028,000 in 2024 from HKD 534,218,000 in 2023, reflecting a growth of about 1.5%[39] - Selling and distribution expenses increased by HKD 3.2 million to HKD 21.0 million, attributed to rising transportation costs consistent with overall sales volume increases[85] - General and administrative expenses rose by HKD 11.3 million to HKD 173.5 million, primarily due to increased employee costs from business expansion[86] Taxation - The estimated tax expense for Hong Kong profits tax was HKD 15,409,000 in 2024, up from HKD 9,653,000 in 2023, a significant increase of approximately 59.1%[43] - The total income tax expense for the six months ended September 30, 2024, was HKD 53,402,000, compared to HKD 43,804,000 in 2023, reflecting an increase of approximately 21.9%[43] - The effective tax rate for the group was 14.6% for the six months ended September 30, 2024, compared to 12.5% for the same period in 2023[92] Market and Operational Insights - The company continues to focus on expanding its market presence and enhancing product offerings, although specific new product details were not disclosed in the financial summary[19] - The company reported a cautious consumer spending pattern due to ongoing geopolitical tensions and inflationary pressures as of September 30, 2024[60] - The company demonstrated strong resilience despite facing significant challenges over the past few years, adapting to market dynamics effectively[62] - The group aims to enhance product design through functional and material development to meet rapidly changing customer preferences[74] - The company plans to continue seeking innovations and breakthroughs in lean production and digitalization under uncertain geopolitical conditions[74] Dividends and Shareholder Returns - The board declared an interim dividend of HKD 0.098 per share, with a payout ratio of 75%, in appreciation of shareholder support[67] - The interim dividend per share increased to HKD 0.098 in 2024 from HKD 0.095 in 2023, marking a rise of approximately 3.2%[48] Corporate Governance - The company has adhered to the corporate governance code and has maintained high standards of corporate governance as of September 30, 2024[123] - The audit committee consists of three independent non-executive directors and is responsible for overseeing the financial reporting process and internal controls[127]

Investment Rating - The report assigns a rating of NR (Not Rated) for Nameson (01982.HK) [2][4]. Core Insights - The company experienced a revenue decline of 4.9% year-on-year for the fiscal year 2023/24, totaling HKD 4,378.9 million. However, net profit increased by 140.5% year-on-year to HKD 380.7 million due to a rise in gross margin and a reduction in impairment from the Myanmar factory [9]. - The company is planning significant capital investments, approximately HKD 400 million, to expand its fabric production capacity by establishing a new factory expected to be completed by 2026, which will add 30 million pounds of capacity [2][4]. - The average selling price (ASP) of knitted products decreased significantly from HKD 125.6 to HKD 109.2 per unit, primarily due to a drop in ASP for cashmere products and raw material prices [2][4]. Financial Summary - Revenue for the fiscal years is as follows: HKD 3,848.6 million (2020/21), HKD 4,040.5 million (2021/22), HKD 4,602.3 million (2022/23), and HKD 4,378.9 million (2023/24) [6][9]. - Gross profit figures are HKD 701.4 million (2020/21), HKD 706.1 million (2021/22), HKD 745.5 million (2022/23), and HKD 774.2 million (2023/24) [6]. - The net profit for the fiscal years is as follows: HKD 298.4 million (2020/21), HKD 275.6 million (2021/22), HKD 158.3 million (2022/23), and HKD 380.7 million (2023/24) [6][9]. Market Position - Nameson has a market capitalization of HKD 1,664 million, with a P/E ratio of 4.6 and a P/B ratio of 0.7, indicating a relatively low valuation compared to peers [4]. - The company’s gross margin stands at 17.7%, and return on equity (ROE) is at 15.5%, reflecting a solid profitability position [4]. Expansion Plans - The company is actively pursuing expansion plans, including investments in personal protective equipment and capacity expansion in Vietnam, with projected expenditures of HKD 150 million and HKD 100 million for the fiscal years 2024/25 and 2025/26, respectively [2][4]. - The fabric business is expected to drive long-term growth, although it currently faces challenges with low utilization rates [2].

Investment Rating - The report assigns a "Strong Buy" rating, indicating an absolute upside of over 50% over the next 12 months [13]. Core Insights - Nameson (01982.HK) experienced a year-on-year decline of 4.9% in topline revenue for FY 2023/24, totaling HKD 4,378.9 million. Despite this, there was a 1.5 percentage point increase in gross margin [2][10]. - The company is facing challenges due to a shrinking market size for knitwear products and strong capital requirements for expansion plans, which are expected to lead to a higher gearing ratio and lower dividend payout ratio [3][10]. - The fabric market remains weak, contributing to losses in this business segment, although the company plans to invest approximately HKD 400 million to expand its fabric production capacity [10][15]. Financial Performance Summary - Revenue for the past four fiscal years is as follows: - FY 2020/21: HKD 3,848.6 million - FY 2021/22: HKD 4,040.5 million - FY 2022/23: HKD 4,602.3 million - FY 2023/24: HKD 4,378.9 million [26]. - Gross profit figures for the same period are: - FY 2020/21: HKD 701.4 million - FY 2021/22: HKD 706.1 million - FY 2022/23: HKD 745.5 million - FY 2023/24: HKD 774.2 million [26]. - Net profit showed significant growth, with FY 2023/24 reaching HKD 380.7 million, a year-on-year increase of 140.5% [26]. Market and Operational Insights - The company anticipates stable sales volume in FY 2024/25 based on the current order book, although there are concerns regarding potential adjustments in order placements by major customers [15]. - The average selling price (ASP) of knitwear products has decreased from HKD 125.6 per unit to HKD 109.2 per unit, primarily due to a drop in cashmere product prices and decreasing raw material costs [15]. - Nameson plans to incur additional investments of HKD 150 million and HKD 100 million for expanding production capacity in Vietnam in FY 2024/25 and FY 2025/26, respectively [15].

Investment Rating - The report does not provide a specific investment rating for Nam Hing Holdings (01982 HK) [2][15] Core Views - Nam Hing Holdings achieved a total revenue of HK$4 38 billion in FY2023 24, a year on year decrease of 4 9% However, net profit increased by 1 4x to HK$380 7 million due to a 1 5 percentage point increase in gross margin and reduced impairment losses from the Myanmar factory [2] - The company declared a final dividend of HK$0 035 per share, representing a dividend payout ratio of 81 9% for the full fiscal year [2] - Sales volume of knitted products rebounded in H2 FY2023 24, offsetting the impact of a decline in average selling price (ASP) The ASP of knitted products dropped significantly from HK$125 6 to HK$109 2 per piece, mainly due to a sharp decline in cashmere product prices and lower raw material costs [2] - The company expects stable sales in FY2024 25 but is cautious about future rush orders from major customers, which could lead to lower than expected sales volume and further pressure on ASPs [2] - Nam Hing Holdings has an aggressive expansion plan, with a current fabric production capacity of 30 million pounds per year The company plans to invest approximately HK$400 million to build a new fabric production facility, expected to be completed by 2026, adding an additional 30 million pounds of capacity However, the fabric business is not yet stable, with low capacity utilization and no breakeven achieved, which could pressure the company in the short term [2] - The company also plans to invest HK$150 million in FY2024 25 and HK$100 million in FY2025 26 to expand its Vietnam capacity to meet customer demand for production outside China [2] Financial Performance - Revenue for FY2023 24 was HK$4 38 billion, down 4 9% year on year [2] - Gross profit increased to HK$774 2 million, with a gross margin of 17 7%, up from 16 2% in FY2022 23 [2] - Net profit surged to HK$380 7 million, a 140 5% year on year increase [2] - Return on equity (ROE) improved to 15 0% in FY2023 24, up from 6 2% in the previous fiscal year [2] - The company's market capitalization is HK$1 7 billion, with a current share price of HK$0 730 [2] Industry Comparison - Nam Hing Holdings has a market capitalization of HK$1 66 billion, with a price to earnings (P E) ratio of 4 6x and a price to book (P B) ratio of 0 7x [5] - The company's revenue of HK$4 38 billion and gross margin of 17 7% are lower compared to peers such as Shenzhou International (02313 HK), which has a revenue of HK$27 6 billion and a gross margin of 24 3% [5] Expansion and Capital Requirements - The company's expansion plans, including the new fabric production facility and Vietnam capacity expansion, could lead to increased capital requirements and potentially higher debt levels or reduced dividend payout ratios [5]

Financial Performance - The company reported a significant increase in profit attributable to shareholders, reaching HKD 361,672 million in 2024, up from HKD 134,844 million in 2023, resulting in basic earnings per share of HKD 15.87, compared to HKD 5.92 in the previous year[39]. - The net profit surged by 140.5% to HKD 380.7 million in 2024, marking a historical high for the company[57]. - The adjusted net profit attributable to the company's owners for the fiscal year ending March 31, 2024, was HKD 361.7 million, compared to HKD 134.8 million for the previous year[119]. - The adjusted net profit increased from HKD 379.3 million for the year ending March 31, 2023, to HKD 396.5 million for the year ending March 31, 2024, representing a growth of 4.5%[171]. - The gross profit increased by 3.8% to HKD 774.2 million, with the gross profit margin improving by 1.5 percentage points to 17.7% in 2024[56]. - Total revenue slightly decreased by 4.9% to HKD 4,378.9 million in 2024, primarily due to a decline in overall selling prices of knitwear products[56]. - The sales revenue of men's and women's knitted products decreased by HKD 152.7 million to HKD 3,513.7 million for the year ended March 31, 2024[90]. - The average selling price of men's and women's knitted products decreased by 13.1%, from HKD 125.6 to HKD 109.1 per piece, despite the increase in sales volume due to stronger-than-expected demand in the second half of the fiscal year[63]. Revenue and Sales - Revenue for the year ended March 31, 2024, was HKD 4,378.9 million, a decrease of 4.9% compared to HKD 4,602.3 million in 2023[186]. - For the fiscal year ending March 31, 2024, the group recorded revenue primarily from sales of knitted products, including women's, men's, and children's apparel, totaling 32.2 million pieces, an increase of 10.3% from 29.2 million pieces in the previous year[62][63]. - The sales volume of men's and women's knitwear increased by 25.7% to 13.2 million pieces in the second half of 2024, contributing to a total of 32.2 million pieces for the fiscal year[55]. - Revenue contributions from major markets as of March 31, 2024, were 31.1% from Japan, 20.6% from mainland China, and 15.7% from Europe[64]. Expenses and Liabilities - The total income tax expense for 2024 was HKD 53,201,000, a slight increase from HKD 51,095,000 in 2023, reflecting a growth of about 4%[6]. - The group reported a sales cost of HKD 3,604.6 million for the year ended March 31, 2024, which includes inventory costs, direct labor costs, subcontracting fees, depreciation, utilities, and production overheads[158]. - Trade payables and notes payable decreased from HKD 363,392,000 in 2023 to HKD 335,457,000 in 2024, representing a decline of approximately 7.7%[46]. - The company's bank borrowings totaled HKD 807,940,000 in 2024, down from HKD 936,755,000 in 2023, indicating a reduction of about 13.0%[48]. - Total lease liabilities as of March 31, 2024, amounted to HKD 163,060 million, an increase from HKD 157,749 million in 2023, with a weighted average effective interest rate of 4.31% compared to 2.77% in 2023[25]. Dividends - The company declared an interim dividend of HKD 0.095 per share, totaling HKD 216,542,000, which was paid on December 20, 2023[9]. - The company declared a second interim dividend of HKD 0.035 per share, totaling HKD 79,779,000, contributing to an annual dividend payout ratio of 82%[34]. - The board has declared a second interim dividend of HKD 0.035 per share for the year ended March 31, 2024, expected to be paid on July 23, 2024[134]. Operational Challenges - The company is facing challenges in Myanmar due to social unrest and military conflict, impacting the development of production bases[3]. - The group confirmed an impairment loss of HKD 34.0 million for its Myanmar production base in the fiscal year 2024[85]. - The group recorded an impairment loss of HKD 34.0 million related to its Myanmar production base, a significant decrease from HKD 243.4 million in the previous year, reflecting ongoing concerns over labor rights and political instability[72][74]. Cash Flow and Financial Management - The company generated net cash from operating activities of HKD 582.9 million for the fiscal year ending March 31, 2024, primarily due to a profit before tax of HKD 433.9 million, adjusted for depreciation of HKD 226.0 million and a decrease in inventory of HKD 120.5 million[121]. - The net cash used in financing activities for the fiscal year was HKD 435.9 million, primarily due to dividend payments of HKD 230.2 million and a net reduction in bank borrowings and lease liabilities of HKD 203.4 million[82]. - The net cash used in investing activities for the fiscal year ending March 31, 2024, was HKD 145.1 million, resulting from the purchase of properties, plants, and equipment totaling HKD 216.3 million, offset by proceeds from the sale of properties, plants, and equipment amounting to HKD 41.6 million and interest received of HKD 29.6 million[107]. Future Outlook and Strategy - The company aims to balance order pricing and expansion while improving profitability and profit margins despite a slight decline in revenue at the end of fiscal year 2024[31]. - The company is committed to enhancing product quality and expanding its customer base, indicating a positive outlook for future growth[35]. - The group aims to continue exploring opportunities for business expansion and diversification while creating greater returns for shareholders[89]. - The company anticipates a slowdown in the shift of production from mainland China to Southeast Asia as global customers continue to expand sales in the Chinese market[58]. Compliance and Governance - The audit committee consists of three independent non-executive directors and is responsible for reviewing and supervising the group's financial reporting process and internal control systems[141]. - The group has adhered to all mandatory provisions of the corporate governance code as of March 31, 2024[153]. - The group has not entered into any long-term foreign currency contracts to mitigate the risk of RMB against USD as of March 31, 2024[129].

Investment Rating - Trading Sell [2][14][30] Core Insights - The company experienced a sales drop of 12% YoY in 1HFY24, primarily due to a decrease in average selling price (ASP) by 12.9% in HKD terms, although sales volume remained resilient at approximately 19 million pieces, reflecting a 1.7% YoY increase [1][10] - Management anticipates a better performance in 2HFY24, driven by fast orders from Japanese clients, with an expected sales volume growth in FY24E at mid-single digits YoY, a revision from previous guidance of a mid-single digit drop [1][12] - The net gearing ratio improved significantly, declining to approximately 3.0% in 1HFY24 from 13.0% in FY23, allowing the company to raise its payout ratio to 75% in 1HFY24 [11][12] Financial Performance - The company's core net profit for FY24E is projected to reach HK$350 million, supported by volume growth and gross profit margin (GPM) expansion due to lower production costs [4] - The company is currently trading at a FY24E PE valuation of 4.7x, which is about a 54% discount compared to its HK-listed textile peers [4] - The target price for the company is set at HK$0.87, indicating a potential upside of 21.1% from the current price of HK$0.72 [14] Operational Developments - The company is expanding its production capacity in Vietnam to reduce lead times and meet client demand, with expectations that Vietnam will account for approximately two-thirds of its total knitwear capacity [12][13] - The largest customer, Uniqlo, accounted for about 48% of the company's revenue in 1HFY24, and as apparel retailers begin to restock, sales are expected to increase significantly in 2HFY24 [12][13] Market Position - Nameson is recognized as one of the leading knitwear manufacturers in China, providing a comprehensive range of services from raw material development to timely delivery [2][10] - The company has diversified its clientele, supplying to internationally renowned brands such as UNIQLO, Tommy Hilfiger, Under Armour, and Lululemon [2][10]

| RESEARCH 6 May, 2024 Nameson (01982.HK) Current Price HK$ 0.69 HKD, mn 2019/ Absolute 27.8% 38.0% 91.3% 63.3% TARGET PRICE HK$ - Expansion of cashmere yarn business: Nameson (01982.HK) entered into a JV agreement with its largest cashmere supplier, Hebei Yuteng, to engage in the manufacturing of cashmere yarn in Vietnam, the total production capacity per annum is designed to be 500 - 550 tonnes. Given the >80% utilization rate of cashmere yarn in Hebei, an increase in production capacity in Vietnam suppor ...

Investment Rating - The report assigns a "Not Rated" (NR) investment rating to Nameson (01982.HK) [3][16]. Core Insights - Nameson is expanding its cashmere yarn business through a joint venture with its largest supplier, Hebei Yuteng, which is expected to enhance production capacity and meet potential demand from Southeast Asia [6][16]. - The company anticipates a capital expenditure of approximately $8 million for the new factory, with the first phase of production (around 300 tons) expected to commence in 2026 [6]. - Despite an increase in sales volume, the average selling price (ASP) may decline due to lower raw material prices and the expiration of long-term agreements, potentially impacting revenue stability [7][11]. - The company has reported a steady order visibility and order book compared to the previous year, indicating potential for future growth despite cautious financial guidance from clients [7][11]. Financial Summary - Revenue for the fiscal year 2022/23 was reported at HKD 4,602.3 million, reflecting a year-on-year growth of 13.9% [11]. - Gross profit for the same period was HKD 745.5 million, with a gross margin of 16.2% [11][12]. - Net profit for 2022/23 was HKD 158.3 million, showing a significant decline of 42.6% compared to the previous year [11][12]. - The company’s return on equity (ROE) for 2022/23 was 6.2%, down from 11.0% in 2021/22 [12][13]. Market Comparison - Nameson has a market capitalization of HKD 1,572.8 million, with a price-to-earnings (P/E) ratio of 7.6, which is lower than the average P/E of 13.7 for comparable companies [18]. - The average gross margin for comparable companies is 17.4%, while Nameson’s gross margin stands at 16.2% [18].

Share Capital and Securities - As of September 30, 2023, the total number of issued ordinary shares was 2,279,392,000[11]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ended September 30, 2023[6]. - The shareholding structure indicates that Mr. Wang Tingzhen holds 1,500,000,000 shares, representing approximately 65.81% of the issued share capital[186]. - Major shareholders include South Spin Investment Limited and Ting Huai Asset Limited, each holding 1,500,000,000 shares, representing 65.81% of the issued share capital[195]. - As of September 30, 2023, the number of share options available for grant under the share option scheme is 110,600,000, representing approximately 4.85% of the issued share capital[36]. - No share options were granted under the share option scheme for the six months ended September 30, 2023[36]. Financial Performance - Adjusted net profit for the six months ended September 30, 2023, decreased by 15.7% to HKD 289.1 million[66]. - Total revenue for the six months ended September 30, 2023, was HKD 3,099.4 million, reflecting a slight increase of 1.6% in sales volume compared to the same period in 2022[64][58]. - The company reported a 19.8% increase in net profit to HKD 305.6 million for the six months ended September 30, 2023[66]. - The group's revenue for the six months ended September 30, 2023, decreased by 12.0% to HKD 2,726.4 million from HKD 3,099.4 million for the same period in 2022[93]. - The net profit attributable to the company's owners for the six months ended September 30, 2023, was HKD 289.1 million, an increase from HKD 232.8 million for the same period in 2022[119]. - The effective tax rate for the group was 12.5% for the six months ended September 30, 2023, compared to 16.6% for the same period in 2022[118]. Revenue Breakdown - Total sales revenue from men's and women's knitted products decreased by HKD 292.2 million to HKD 2,255.0 million, while cashmere yarn sales revenue increased by HKD 49.1 million to HKD 330.0 million[93]. - Revenue from Japan was HKD 764,182,000, down 17.7% from HKD 928,368,000 year-over-year[199]. - North America revenue decreased by 18.5% to HKD 423,311,000 from HKD 519,238,000[199]. - Europe revenue fell by 19.2% to HKD 511,823,000 compared to HKD 633,759,000 in the previous year[199]. - Revenue from Mainland China was HKD 524,447,000, a slight decrease of 4% from HKD 546,430,000[199]. - Other countries generated revenue of HKD 502,619,000, an increase of 6.6% from HKD 471,572,000[199]. Loans and Financial Obligations - The company has a loan agreement dated June 27, 2023, for a maximum of HKD 200 million with a three-year term[21]. - The company has a loan agreement dated March 8, 2023, for a maximum of HKD 150 million with a three-year term[21]. - The company has a loan agreement dated December 15, 2022, for a maximum of HKD 130 million with a three-year term[21]. - The company has a loan agreement dated September 21, 2021, for a maximum of HKD 250 million with a three-year term[21]. - The company has a loan agreement dated August 11, 2021, for a maximum of HKD 300 million with a three-year term[21]. - The group's total bank borrowings and lease liabilities as of September 30, 2023, amounted to HKD 1,208.5 million, with repayment due within one year being HKD 721.1 million[133]. Operational Insights - The company has increased production capacity in Vietnam to meet customer demand amid weak consumer sentiment[64]. - The company is expanding its operations in Vietnam, enhancing marketing, customer service, and production capabilities[68]. - The company is focusing on high-margin orders despite a decrease in cashmere sweater sales[64]. - The company plans to balance production capacity in mainland China with the demand for quick-turn orders[87]. - The company faced challenges in its Myanmar manufacturing operations due to political considerations affecting brand clients[81]. - The textile market is experiencing weak demand due to global inflation and high inventory levels among fashion retailers[83]. Expenses and Cost Management - Sales cost for the first half amounted to HKD 2,228.4 million, primarily driven by inventory and direct labor costs[82]. - Gross profit declined by 3.6% to HKD 497.994 million, with a gross margin increase from 16.7% to 18.3%[78]. - General and administrative expenses decreased by HKD 6.2 million to HKD 162.2 million, attributed to ongoing cost control measures[100]. - Selling and distribution expenses decreased by HKD 5.9 million to HKD 17.8 million, mainly due to reduced transportation costs[99]. Cash Flow and Investments - The group's net cash generated from operating activities for the six months ended September 30, 2023, was HKD 383.6 million, compared to HKD 168.4 million for the same period in 2022[122]. - The group's total cash and cash equivalents increased by HKD 402.5 million, reaching HKD 1,120.7 million as of September 30, 2023, up from HKD 717.0 million as of March 31, 2023[130]. - The net cash used in investing activities for the six months ended September 30, 2023, was HKD 34.1 million, mainly due to the acquisition of property, plant, and equipment[129]. - Capital expenditures for the six months ended September 30, 2023, amounted to approximately HKD 118.9 million, mainly related to machinery procurement and the construction of a new production facility in Vietnam[135]. Corporate Governance and Compliance - The company has adopted corporate governance practices that comply with the mandatory provisions of the corporate governance code, maintaining high standards of governance[182]. - The company is required to maintain that the Wang family remains the major shareholder and retains management control[21]. - The company has established policies to ensure credit sales are only made to customers with appropriate credit records, and no significant impairments from trade receivables are expected[162]. - The group maintains bank balances and deposits primarily with major financial institutions in Hong Kong, mainland China, and Vietnam, which are considered to have high credit quality, with no anticipated losses from these institutions[162]. Employee and Compensation - As of September 30, 2023, the group employed approximately 15,100 full-time employees across China, Vietnam, Hong Kong, and Myanmar, with total employee costs amounting to HKD 534.2 million for the six months ended September 30, 2023[164]. - The group’s compensation policy is based on individual performance and aligns with salary trends in mainland China, Vietnam, Hong Kong, and Myanmar[180].

Financial Performance - Revenue for the six months ended September 30, 2023, was HKD 2,726,382 thousand, an increase from HKD 2,228,388 thousand in the same period of 2022, representing a growth of approximately 22.4%[3] - Gross profit for the period was HKD 497,994 thousand, down from HKD 516,400 thousand year-over-year, indicating a decrease of about 3.9%[3] - Operating profit increased to HKD 371,685 thousand, compared to HKD 320,470 thousand in the previous year, reflecting a growth of approximately 15.9%[3] - Net profit for the period was HKD 305,583 thousand, up from HKD 255,130 thousand, marking an increase of around 19.8%[4] - Basic and diluted earnings per share rose to HKD 12.7, compared to HKD 10.2 in the same period last year, representing a growth of approximately 24.5%[3] - Total comprehensive income for the period was HKD 276,340 thousand, compared to HKD 223,940 thousand, indicating an increase of about 23.4%[6] Assets and Liabilities - Total equity as of September 30, 2023, was HKD 2,740,338 thousand, up from HKD 2,477,674 thousand as of March 31, 2023, reflecting a growth of approximately 10.6%[12] - Total liabilities increased to HKD 2,056,060 thousand from HKD 1,951,427 thousand, representing an increase of about 5.4%[12] - Cash and cash equivalents decreased to HKD 872,230 thousand from HKD 714,432 thousand, indicating a decrease of approximately 22.1%[12] - The group's non-current assets as of September 30, 2023, amounted to HKD 2,363,134 thousand, slightly down from HKD 2,382,275 thousand as of March 31, 2023, indicating a decrease of about 0.80%[27] - The group's total assets reached HKD 4,796,398 thousand as of September 30, 2023, up from HKD 4,429,101 thousand as of March 31, 2023, representing an increase of approximately 8.29%[27] Revenue Breakdown - For the six months ended September 30, 2023, total revenue was HKD 2,168,642 thousand, a decrease from HKD 2,191,186 thousand for the same period in 2022, representing a decline of approximately 1.03%[20] - Revenue from Customer A was HKD 1,307,649, a decrease of 7.1% compared to HKD 1,407,195 for the same period in 2022[38] - Revenue from Japan for the six months ended September 30, 2023, was HKD 764,182, a decrease of 17.7% from HKD 928,368 in the previous year[46] - Revenue from North America decreased by 18.5% to HKD 423,311 compared to HKD 519,238 for the same period in 2022[46] - Revenue from Europe decreased by 19.2% to HKD 511,823 from HKD 633,759 in the previous year[46] - Revenue from mainland China was HKD 524,447, a slight decrease of 4% from HKD 546,430 in the same period of 2022[46] Expenses and Income - Total expenses for the six months ended September 30, 2023, amounted to HKD 2,408,435, a decrease of 16.5% from HKD 2,884,127 in the same period of 2022[40] - Other income for the six months ended September 30, 2023, totaled HKD 46,676, down 38.3% from HKD 75,629 in the previous year[39] - The company reported a financial income of HKD 10,628 thousand, compared to a financial expense of HKD 33,684 thousand in the previous period, showing a significant improvement in financial performance[3] Cash Flow and Financing - The net cash generated from operating activities for the six months ending September 30, 2023, was HKD 383.6 million, primarily due to a profit before tax of HKD 349.4 million adjusted for depreciation and inventory reduction[142] - The net cash used in investment activities for the six months ended September 30, 2023, was HKD 34.1 million, primarily due to the acquisition of properties, plants, and equipment amounting to HKD 72.8 million, offset by proceeds from the sale of properties, plants, and equipment of HKD 28.1 million[143] - The group’s cash flow from financing activities generated a net cash inflow of HKD 52.9 million for the six months ended September 30, 2023[180] Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.095 per share, increasing the payout ratio to approximately 75%[79] - The board has declared an interim dividend of HKD 0.095 per share for the six months ended September 30, 2023, compared to HKD 0.051 per share in 2022[171] Operational Insights - The company has increased its production capacity in Vietnam to meet customer demand and enhance operational agility[75] - The company is facing challenges in its Myanmar manufacturing facility due to political considerations affecting customer purchasing decisions[100] - The company plans to continue innovating and enhancing product design capabilities to meet changing customer preferences in rapidly evolving end markets[101] Market Conditions and Future Outlook - The company expects a long-term growth rate of 3.00% per annum based on economic factors such as GDP growth and inflation[42] - The group anticipates further delays in production and sales orders from its Myanmar production base due to ongoing economic and political uncertainties[110] - The company is committed to enhancing renewable energy levels at production bases in response to energy-saving initiatives in mainland China[101]