Company Overview Company Mentioned - 米华控股 (Mihua Holdings) Key Points Financial Performance - The company held its annual performance conference for the fiscal year 2023 to 2024, indicating a focus on financial results and future outlook [1] Management Representation - The conference was hosted by Tim, who introduced the management team present at the event, highlighting the importance of leadership in discussing the company's performance [1] Investor Engagement - The company expressed gratitude towards investors, analysts, and media for their ongoing support and interest, emphasizing the significance of stakeholder engagement in corporate communications [1] Future Outlook - The conference serves as a platform for discussing future strategies and performance expectations, which is crucial for investor confidence and market positioning [1]

Financial Data and Key Metrics Changes - The company achieved a revenue of HKD 18.4 billion, representing a year-on-year growth of 6.1% [1] - Net profit attributable to the parent company was HKD 2.3 billion, up 20.2% year-on-year [1] - Gross margin improved by 0.9 percentage points to 39.4%, while net margin increased by 1.5 percentage points to 12.5% [1] - EBITDA reached HKD 1.97 billion, growing by 1.2% [1] - Basic earnings per share were HKD 0.5909, a year-on-year increase of 21.1% [1] Business Line Data and Key Metrics Changes - Revenue from the China region was HKD 11.98 billion, up 8.1% year-on-year [1] - North America revenue was HKD 4.28 billion, growing by 2.3% [1] - Revenue from Europe and other overseas regions was HKD 1.2 billion, increasing by 2.9% [1] - Home Group revenue was HKD 674 million, a growth of 10% [2] - Other revenue declined by 8.5% to HKD 70 million [2] Market Data and Key Metrics Changes - The Chinese market accounted for 65% of total revenue, while the local market contributed 23.3% [2] - The gross margin for the overall market business was 40.4%, with North America at 37.1% and Europe at 30.3% [2] - Inventory turnover days decreased from 71 to 49 days, and accounts receivable turnover days fell from 40 to 33 days [3] Company Strategy and Development Direction - The company is focusing on enhancing brand marketing and product innovation to adapt to changing consumer preferences [4][5] - Plans to increase market penetration in lower-tier cities and expand e-commerce channels are in place [11][14] - The company aims to maintain a dividend payout ratio of around 50% and has a share buyback strategy [1][9] Management's Comments on Operating Environment and Future Outlook - Management noted that the demand for functional sofas remains strong despite a decline in new housing completions [7][8] - The company anticipates a shift towards the stock housing market and is responding to government policies promoting "old-for-new" exchanges [22] - Management expressed optimism about maintaining stable material prices and controlling shipping costs despite macroeconomic pressures [6][5] Other Important Information - The company plans to open approximately 700 to 800 new stores in the upcoming fiscal year [12][16] - The company is exploring new materials and product innovations to meet evolving consumer demands [21] - The company has established production bases in key regions to support future market growth [18] Q&A Session Summary Question: What new strategies are in place for category and channel management in the current market? - The company will enhance brand marketing and collaborate with major media to strengthen brand presence [4] Question: What is the outlook for overseas market growth? - The company expects to accelerate growth in the overseas market through product innovation and deep partnerships with key clients [5] Question: How will material prices fluctuate? - Material prices are expected to remain stable due to market conditions and geopolitical factors [6] Question: How does the company plan to support dealers and expand e-commerce? - The company will increase personnel for e-commerce collaboration and enhance marketing efforts across various platforms [11] Question: What are the plans for new store openings? - The company plans to open around 700 to 800 new stores, focusing on tiered city distribution [12][16] Question: How will the company maintain competitiveness in the functional sofa market? - The company will invest in R&D and leverage its technology patents to enhance product competitiveness [13][14] Question: What is the company's approach to share buybacks and dividends? - The company will consider share buybacks and dividends based on cash flow and investment opportunities [9] Question: How does the company view the impact of the real estate market on growth? - The company acknowledges challenges from the real estate market but sees potential in the functional sofa segment [8][18]

Investment Rating - The report maintains a "Buy" rating for the company [3][5]. Core Insights - The company reported a strong performance for FY2024, achieving revenue of HKD 18.411 billion, a year-on-year increase of 6.1%, and a net profit attributable to shareholders of HKD 2.302 billion, up 20.2% year-on-year. The second half of FY2024 saw revenue growth of 18.4% and net profit growth of 41.7% [2][3]. - The domestic sales segment generated revenue of HKD 11.987 billion, reflecting an 8.1% increase year-on-year, while the international sales segment contributed HKD 6.153 billion, a 3.2% increase year-on-year. Notably, the North American market saw a significant recovery with a 38.3% year-on-year increase in H2 revenue [2][3]. - The company is focusing on enhancing its product innovation and expanding its distribution channels, including online and offline strategies, to strengthen its market position [2][3]. Financial Performance Summary - For FY2024, the company achieved a revenue of HKD 18.411 billion, with a gross margin of 39.4% and a net profit margin of 12.5% [4][7]. - The company’s earnings per share (EPS) for FY2024 is projected at HKD 0.59, with forecasts for FY2025, FY2026, and FY2027 at HKD 0.66, HKD 0.74, and HKD 0.81 respectively [3][4]. - The company maintains a high dividend payout ratio of 50.7% for FY2024, indicating a strong commitment to returning value to shareholders [2][3]. Future Earnings Forecast - The company’s net profit is expected to grow to HKD 2.586 billion in FY2025, HKD 2.878 billion in FY2026, and HKD 3.184 billion in FY2027, representing year-on-year growth rates of 12.3%, 11.3%, and 10.6% respectively [3][4]. - The price-to-earnings (P/E) ratio is projected to decrease from 12.4X in FY2024 to 9.0X in FY2027, indicating potential for valuation improvement [3][4].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [2][6]. Core Insights - The company reported a revenue of HKD 18.41 billion for FY24, representing a year-on-year growth of 6.1%, and a net profit of HKD 2.30 billion, up 20.2% year-on-year [2]. - The second half of FY24 showed significant improvement in both domestic and international sales, with domestic sales growing by 11.2% and international sales in North America and Europe increasing by 38.3% and 35.0% respectively [2]. - The company has expanded its offline presence, adding 765 new stores in China, bringing the total to 7,236 stores [2]. - The gross margin improved to 39.4% for FY24, driven by a decrease in raw material costs, particularly leather and steel, which fell by 10.1% and 8.1% respectively [2]. Financial Performance Summary - FY24 revenue: HKD 18,411 million, with a growth rate of 6.1% [4]. - FY24 net profit: HKD 2,302 million, with a growth rate of 20.2% [4]. - FY25 estimated EPS: HKD 0.65, with a corresponding PE ratio of 11X [2][4]. - The company’s net profit margin improved to 12.5%, up 1.5 percentage points year-on-year [2]. Market Analysis - The domestic furniture market shows resilience, with the sofa and mattress segments growing by 7.7% and 14.4% respectively [2]. - The penetration rate of functional sofas in China is expected to increase, providing growth opportunities despite potential industry headwinds [2]. - The overseas market is currently favorable, with expectations of continued demand recovery and inventory replenishment cycles [2].

Financial Data and Key Metrics Changes - The company achieved a revenue of HKD 18.4 billion, representing a year-on-year growth of 6.1% [1] - Net profit attributable to the parent company was HKD 2.3 billion, up 20.2% year-on-year [1] - Gross margin improved by 0.9 percentage points to 39.4%, while net margin increased by 1.5 percentage points to 12.5% [1] - EBITDA reached HKD 1.97 billion, growing by 1.2% [1] - Basic earnings per share were HKD 0.5909, a year-on-year increase of 21.1% [1] Business Line Data and Key Metrics Changes - Revenue from the China region was HKD 11.98 billion, up 8.1% year-on-year [1] - North America revenue was HKD 4.28 billion, growing by 2.3% [1] - Revenue from Europe and other overseas regions was HKD 1.2 billion, increasing by 2.9% [1] - Home Group revenue was HKD 674 million, up 10% [2] - Other revenue declined by 8.5% to HKD 70 million [2] Market Data and Key Metrics Changes - The Chinese market accounted for 65% of total revenue, while the local market contributed 23.3% [2] - The overall market business gross margin was 40.4%, with North America at 37.1% and Europe at 30.3% [2] - Sofa sales reached 1.12 million units, with a 25.7% growth in China and a 28% increase in export sales [3] Company Strategy and Development Direction - The company is focusing on brand marketing and enhancing product offerings to adapt to changing consumer preferences [4] - Plans to increase marketing efforts targeting younger consumers who prefer functional sofas [7] - The company aims to expand its market share in the functional sofa segment, which is currently underpenetrated [8] - Emphasis on maintaining a stable gross margin despite market pressures and competition [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the decline in new housing completions has shifted consumer focus towards home improvement rather than real estate investment [7] - The company expects stable material prices despite geopolitical tensions [6] - Management is optimistic about the demand for functional sofas, anticipating significant growth potential in this segment [8] Other Important Information - The company maintains a dividend payout ratio of approximately 50%, with a total dividend expenditure of HKD 1.167 billion [3] - The company plans to open 700-800 new stores in the upcoming fiscal year [12][16] - The company is exploring new markets for brand expansion, particularly in developing countries [15] Q&A Session Summary Question: What new strategies are being implemented for inventory and sales recovery? - The company plans to enhance brand marketing and collaborate with major media to improve brand visibility [4] Question: What is the outlook for overseas market growth? - The company is optimistic about product innovation and collaboration with retailers to drive sales [5] Question: How will material prices be affected? - Material prices are expected to remain stable due to market conditions and geopolitical factors [6] Question: How does the company plan to support dealers? - The company will increase personnel and enhance e-commerce collaboration to improve customer acquisition [11] Question: What are the plans for new store openings? - The company plans to open approximately 700-800 stores, focusing on various city tiers [12][16] Question: How will average price declines affect gross margins? - The company aims to maintain gross margins by targeting different consumer segments with varied pricing strategies [12] Question: What is the strategy for functional sofas and market competition? - The company will invest in R&D and maintain cost advantages to stay competitive in the functional sofa market [13][14]

Financial Performance - Total revenue for the fiscal year ending March 31, 2024, was HKD 18,798,633, an increase of 5.7% from HKD 17,788,864 in the previous year[5] - Gross profit for the fiscal year was HKD 7,248,027, representing a gross margin of 38.5%, compared to HKD 6,678,267 and a margin of 37.5% in the previous year[5] - Net profit for the year was HKD 2,396,002, up 29% from HKD 1,858,178 in the previous year[5] - Earnings per share (EPS) increased to HKD 59.09 from HKD 48.80, reflecting a growth of 21%[7] - Total revenue for the year ended March 31, 2024, was HKD 18,411,197,000, with external sales from sofas and related products contributing HKD 12,658,825,000[22] - The total profit before tax was HKD 2,864,475,000, reflecting the overall operational efficiency of the company[22] - Profit attributable to equity holders of the company was HKD 2,302,366 thousand, an increase of 20.2% compared to the previous year[40] - The company's operating profit before tax was HKD 2,354,872,000, showing a robust performance despite various financial costs[24] Assets and Equity - Total assets as of March 31, 2024, amounted to HKD 19,807,520, a slight increase from HKD 19,640,488 in the previous year[10] - Total equity rose to HKD 13,075,669, compared to HKD 12,527,770 in the previous year, indicating a growth of 4.4%[10] Expenses and Costs - The company reported a decrease in administrative expenses to HKD 956,000 from HKD 1,046,952, a reduction of approximately 8.7%[5] - Financial costs totaled HKD 200,500,000, and goodwill impairment was recorded at HKD 12,268,000[22] - Depreciation and amortization expenses totaled HKD 684,515,000, which is a critical factor in assessing the company's operational efficiency[26] - Employee costs rose by 15.5% from approximately HKD 1,779,759 thousand in FY2023 to HKD 2,055,123 thousand in FY2024[60] - Selling and distribution expenses decreased by 0.1% to approximately HKD 3,314,346 thousand in FY2024, accounting for about 18.0% of revenue[62] - Administrative and other expenses decreased by 8.7% to approximately HKD 956,000 thousand in FY2024, representing about 5.2% of revenue[63] Market Performance - Revenue from external sales in the China market (including Hong Kong and Macau) reached HKD 12,257,665,000, up from HKD 11,388,618,000 in the previous year, indicating a growth of approximately 7.6%[28] - The North American revenue was HKD 4,284,307,000, slightly increasing from HKD 4,188,848,000, reflecting a growth of about 2.3%[28] - Sales from the Chinese market accounted for over 65% of total revenue, with main business income reaching HKD 11,986,885 thousand, an increase of 8.1% year-on-year[41] - The company has seen a significant increase in the penetration rate of functional sofas in the Chinese market, rising from 7.2% to 9.7%[41] Dividends and Shareholder Returns - The company plans to declare a final dividend of HKD 0.15 per share, totaling approximately HKD 581,631 thousand, subject to shareholder approval[34] - The board proposed a final dividend of HKD 0.15 per share, with total dividends for FY2024 accounting for approximately 50.7% of profit attributable to equity holders[66] Strategic Initiatives - The company plans to continue expanding its market presence and investing in new product development to drive future growth[12] - The company aims to leverage its long-term accumulated product, brand, and channel advantages to achieve continuous market share growth in China's stock market[88] - The company continues to seek acquisition opportunities in the furniture sector to accelerate its development[81] Corporate Governance - The company emphasizes the importance of effective corporate governance to enhance group performance and protect shareholder interests[92] - The audit committee consists of four independent non-executive directors, ensuring compliance with professional qualifications and financial management expertise[97] Share Repurchase - The company repurchased a total of 44,842,800 ordinary shares at a total cost of approximately HKD 228,565,371 during the fiscal year 2024[89] - In May 2023, the company repurchased 15,000,000 shares at a price range of HKD 5.26 to HKD 5.59, totaling HKD 80,911,500[89] - In December 2023, the company repurchased 15,842,800 shares at a price range of HKD 4.99 to HKD 5.23, totaling HKD 80,938,111[89] - In January 2024, the company repurchased 14,000,000 shares at a price range of HKD 4.50 to HKD 4.97, totaling HKD 66,715,760[89] Compliance and Audit - The financial statements for the year ending March 31, 2024, have been audited by PwC, confirming the accuracy of the reported figures[101] - The company is currently evaluating the potential impact of new accounting standards and amendments that will be mandatory from April 1, 2024[19] - The company has adopted several revised standards effective from April 1, 2023, which did not have a significant financial impact on the consolidated financial statements[16]

Financial Performance - For the first half of the fiscal year 2024, the company recorded revenue of approximately HKD 8,937,569,000, a year-on-year decrease of about 3.8% (approximately 1.6% increase in RMB terms) [7] - The profit attributable to equity holders was approximately HKD 1,136,042,000, representing a year-on-year increase of about 4.0% (approximately 9.8% increase in RMB terms) [7] - The company's total revenue for the review period was approximately HKD 9,151,563, a decrease of about 4.0% compared to HKD 9,533,349 in the same period last year [23] - The gross profit margin for the review period was approximately 39.1%, compared to 38.8% in the same period last year [23] - Operating profit increased to HKD 1,509,417, up 6.3% from HKD 1,419,517 in the previous year [88] - Net profit for the period was HKD 1,184,579, representing a 10.9% increase compared to HKD 1,068,176 in the prior year [90] - Basic earnings per share for the period was HKD 29.05, up from HKD 27.80, indicating a growth of 4.5% [90] - The company reported a net other comprehensive loss of HKD 765,704, an improvement from a loss of HKD 1,322,386 in the previous year [88] - The company’s total comprehensive income for the period was HKD 418,875, compared to a loss of HKD 254,210 in the same period last year [90] Revenue Breakdown - In the domestic market, the main revenue was approximately HKD 6,005,321,000, with a year-on-year growth of about 5.1% (approximately 11% increase in RMB terms) [8] - Revenue from the China market reached approximately HKD 6,069,863, with a main business revenue of about HKD 6,005,321, reflecting a growth of approximately 5.1% year-on-year [17] - The North American market recorded revenue of approximately HKD 2,037,448,000, with a year-on-year decrease of about 5.4% [9] - Revenue from the North American market decreased to HKD 2,037,448, down 20.5% from HKD 2,564,090 in the previous year [125] - Revenue from the bedding and related products business grew by approximately 7.3% to about HKD 1,491,422, compared to HKD 1,389,690 last year [27] - Revenue from other products reached approximately HKD 906,688, an increase of about 6.7% compared to HKD 849,916 last year [28] - Revenue from the sofa and related products segment was HKD 6,176,703, accounting for approximately 69% of total revenue [127] Market Expansion and Strategy - The company aims to enhance its market share in the soft furniture sector, which currently has a low single-digit market penetration [11] - The company plans to leverage its production capacity and cost advantages to expand its market share in Europe and North America [15] - The company anticipates continued growth in market share in the smart home segment, driven by increasing consumer preference for functional furniture [19] - The company is actively pursuing strategic acquisitions to strengthen its market position and diversify its product offerings [102] - The company has plans for market expansion and new product development, particularly in the smart furniture segment, to enhance its competitive edge [102] Shareholder Actions - The company declared an interim dividend of HKD 0.15 per share, maintaining a payout ratio of around 50% [7] - The board declared an interim dividend of HKD 0.15 per share, consistent with the previous year's interim dividend [60] - The interim dividend is expected to be paid on or before January 2, 2024, to shareholders listed on December 1, 2023 [77] - The group repurchased and canceled 15 million shares at a total purchase price of HKD 80,911,500 during the review period [7] - The group repurchased 15,000,000 shares in May 2023 for a total consideration of HKD 80,911,500, which were subsequently canceled [61] Cost Management and Expenses - Financial costs rose by approximately 60.9% to HKD 98,266,000, mainly due to increased loan interest expenses [42] - Administrative and other expenses decreased by approximately 20.3% to HKD 450,051,000, with the percentage of revenue dropping from about 6.1% to 5.0% [40] - Advertising and marketing expenses rose by approximately 24.4% to HKD 308,418,000, with the percentage of revenue increasing from about 2.7% to 3.5% [39] - Other income decreased by approximately 12.4% to about HKD 213,994,000 in the first half of the fiscal year 2024, primarily due to a decline in government subsidies [34] Employee and Operational Metrics - The group has 27,170 employees as of September 30, 2023, an increase from 25,832 employees on March 31, 2023 [56] - Total employee costs for the first half of the fiscal year 2024 were approximately HKD 1,479,784,000, compared to HKD 1,459,841,000 in the same period of the previous fiscal year [56] - The company opened 417 new stores during the first half of the fiscal year 2024, maintaining a closure rate of approximately 7.3% [8] - The company opened a net increase of 417 brand specialty stores in China, totaling 6,888 stores, with a store closure rate of approximately 7.3% [19] Financial Position and Assets - As of September 30, 2023, total assets amounted to HKD 19,967,725 thousand, an increase from HKD 19,640,488 thousand as of March 31, 2023, reflecting a growth of approximately 1.67% [93] - Current assets increased to HKD 8,878,770 thousand from HKD 8,414,634 thousand, representing a rise of about 5.49% [93] - Non-current assets totaled HKD 11,088,955 thousand, down from HKD 11,225,854 thousand, indicating a decrease of approximately 1.22% [93] - Total liabilities rose to HKD 7,493,205 thousand from HKD 7,112,718 thousand, marking an increase of around 5.35% [94] - The company's equity attributable to owners decreased slightly to HKD 11,510,039 thousand from HKD 11,556,777 thousand, a decline of approximately 0.40% [96] Risk Management and Compliance - The group faces various financial risks including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since March 31, 2023 [115] - The company confirmed compliance with the corporate governance code, except for the separation of the roles of Chairman and CEO [80] - The board consists of four independent non-executive directors, ensuring a balance of power and independent opinions [80] - The company has adopted the standard code of conduct for securities transactions by directors, confirming compliance for the six-month period [81] Share Options and Ownership - The company reported a total of 3,906,702,800 shares issued as of September 30, 2023, with a major shareholder, Min Wah Investment Limited, holding approximately 61.84% of the issued share capital [69] - The stock options plan adopted on March 5, 2010, and the one on July 3, 2020, have seen various stock options granted, with a total of 40,400 options unexercised by Mr. Huang Minli as of September 30, 2023 [72] - The company has a total of 2,418,872,400 shares held by Mr. Huang Minli, which includes shares deemed beneficially owned by Ms. Xu [68] - The number of unexercised share options as of September 30, 2023, is 14,244,400 after accounting for cancellations and exercises [74] Future Outlook - The group aims to enhance product quality and innovation, focusing on upgraded sofa features such as compactness and aesthetics [58] - The group plans to increase investment in smart manufacturing and digital management to improve production efficiency and reduce labor costs [58] - The company continues to explore market expansion opportunities and new product development strategies to enhance future growth [128]

Revenue Performance - Total revenue for the six months ended September 30, 2023, was HK$9,151.56 million, a decrease of 4% compared to HK$9,533.35 million in the same period last year[2] - Total revenue for the six months ended September 30, 2023, was HKD 8,937.6 million[16] - Total revenue for the six months ended September 30, 2023, was HK$8,937,569 thousand, a decrease from HK$9,289,026 thousand in the same period in 2022[17] - Total revenue for the company was approximately 8,937,569 thousand HKD, a year-on-year decrease of 3.8%[36] - Total revenue decreased by 4.0% to approximately HKD 9,151,563 thousand in the current period compared to HKD 9,533,349 thousand in the same period last year[41][42] Profitability - Gross profit for the period was HK$3,491.92 million, down 3.2% from HK$3,608.08 million in the previous year[2] - Operating profit increased by 6.3% to HK$1,509.42 million, compared to HK$1,419.52 million in the prior year[2] - Net profit attributable to equity holders of the company was HK$1,136.04 million, up 4% from HK$1,092.13 million in the same period last year[3] - The company's total comprehensive income for the period was HK$418.88 million, compared to a loss of HK$254.21 million in the previous year[2] - Net profit attributable to equity holders was approximately 1,136,042 thousand HKD, a year-on-year increase of 4.0%[36] - Profit attributable to equity holders of the company increased by 4.0% to HKD 1,136,042 thousand in the first half of fiscal year 2024 from HKD 1,092,131 thousand in the same period last year[61] - The company's net profit margin improved to 12.7% in the first half of fiscal year 2024, up from 11.8% in the same period last year[61] Segment Performance - Revenue from sofa and matching products reached HKD 6,176.7 million, accounting for 69.1% of total revenue[16] - Revenue from bed and matching products was HKD 1,491.4 million, representing 16.7% of total revenue[16] - Revenue from other products amounted to HKD 906.7 million, contributing 10.1% to total revenue[16] - Revenue from Home Group business was HKD 298.2 million, making up 3.3% of total revenue[16] - Segment profit for sofa and matching products was HKD 1,154.2 million, accounting for 71.4% of total segment profit[16] - Segment profit for bed and matching products was HKD 373.9 million, representing 23.1% of total segment profit[16] - Segment profit for other products was HKD 67.9 million, contributing 4.2% to total segment profit[16] - Segment profit for Home Group business was HKD 1.1 million, making up 0.1% of total segment profit[16] - Total segment profit for the six months ended September 30, 2023, was HKD 1,615.7 million[16] - Revenue from sofa and matching products decreased to HK$6,176,703 thousand in 2023 from HK$6,707,868 thousand in 2022[17][19] - Revenue from bed and matching products increased to HK$1,491,422 thousand in 2023 from HK$1,389,690 thousand in 2022[17][19] - Sofa and related products revenue decreased by 7.9% to HKD 6,176,703 thousand, while bed and related products revenue increased by 7.3% to HKD 1,491,422 thousand[41][43][44] - Other product sales revenue grew by 6.7% to HKD 906,688 thousand[41][45] - Total sofa product sales increased by 17.0% to approximately 882 thousand sets, with domestic sales in China growing by 27.6% and export sales increasing by 3.7%[42] Regional Performance - Revenue from China (including Hong Kong and Macau) increased to HK$6,069,863 thousand in 2023 from HK$5,775,388 thousand in 2022[17][19] - Revenue from North America decreased to HK$2,037,448 thousand in 2023 from HK$2,564,090 thousand in 2022[17][19] - Revenue from Europe remained relatively stable at HK$548,199 thousand in 2023 compared to HK$546,829 thousand in 2022[17][19] - China market revenue reached approximately 6,069,863 thousand HKD, with main business revenue of 6,005,321 thousand HKD, a year-on-year increase of 5.1%[37] - North America market revenue declined by 20.5% to HKD 2,037,448 thousand, but excluding the impact of shipping surcharges, the decline was 5.4%[39] - Europe and other overseas markets (excluding Home Group) revenue decreased by 20.6% to HKD 532,044 thousand, with sofa sales dropping by 8.8% to HKD 376,967 thousand[40] - Home Group revenue increased by 6.7% to HKD 298,214 thousand[40][46] Financial Position - Total assets as of September 30, 2023, were HK$19,967.73 million, a slight increase from HK$19,640.49 million as of March 31, 2023[5] - Cash and bank balances increased by 15.2% to HK$4,306.97 million as of September 30, 2023, compared to HK$3,738.23 million at the end of March 2023[5] - Total equity attributable to equity holders of the company was HK$12,474.52 million, a slight decrease from HK$12,527.77 million as of March 31, 2023[7] - Total liabilities increased by 5.3% to HK$7,493.21 million as of September 30, 2023, compared to HK$7,112.72 million at the end of March 2023[7] - The company's net accounts receivable and notes receivable as of September 30, 2023, were HK$1,659,768 thousand, compared to HK$1,598,310 thousand as of March 31, 2023[25] - The company's trade and other payables and accrued expenses as of September 30, 2023, were HK$837,445 thousand, compared to HK$950,941 thousand as of March 31, 2023[28] - The company's bank borrowings as of September 30, 2023, were HK$4,709,037 thousand, compared to HK$4,176,429 thousand as of March 31, 2023[30] - The company's capital gearing ratio increased to 40.9% as of September 30, 2023, compared to 36.1% as of March 31, 2023[63] Earnings and Dividends - Basic earnings per share increased to 29.05 HK cents, up from 27.80 HK cents in the same period last year[4] - The company's basic earnings per share for the six months ended September 30, 2023, were HK$0.2905, compared to HK$0.2780 for the same period in 2022[23] - The company's diluted earnings per share for the six months ended September 30, 2023, were HK$0.2904, compared to HK$0.2778 for the same period in 2022[23] - The company declared an interim dividend of HK$0.15 per share for the six months ended September 30, 2023, the same as the previous year[24] - The company declared an interim dividend of HKD 0.15 per share, unchanged from the previous year[70] Costs and Expenses - Direct costs decreased by 4.1% to HKD 5,445,649 thousand, with raw material costs dropping by 6.7% and employee costs rising by 7.6%[49] - Other income declined by 12.4% to HKD 213,994 thousand, primarily due to a reduction in government subsidies[48][52] - Sales and distribution expenses decreased by 13.0% to HKD 1,604,156 thousand in the first half of fiscal year 2024 from HKD 1,843,264 thousand in the same period last year[55] - Advertising, marketing, and brand building expenses increased by 24.4% to HKD 308,418 thousand in the first half of fiscal year 2024 from HKD 248,017 thousand in the same period last year[56] - Administrative and other expenses decreased by 20.3% to HKD 450,051 thousand in the first half of fiscal year 2024 from HKD 564,496 thousand in the same period last year[57] - Total employee costs for the first half of the 2024 fiscal year were approximately HKD 1,479.784 million, compared to HKD 1,459.841 million in the same period of the previous fiscal year[68] Other Financial Metrics - Other income for the period was HK$244,323 thousand[17] - The company's share of profits from joint ventures was HK$1,788 thousand[17] - Net exchange gains amounted to HK$57,194 thousand[17] - Income tax expenses decreased to HK$229,716 thousand in 2023 from HK$292,061 thousand in 2022[21] - Sales of waste materials increased by 35.5% to HKD 21,191 thousand in the first half of fiscal year 2024 compared to HKD 15,641 thousand in the same period last year[53] - Government subsidies decreased by 37.9% to HKD 105,414 thousand in the first half of fiscal year 2024 from HKD 169,871 thousand in the same period last year[53] - Interest income rose by 54.8% to HKD 83,344 thousand in the first half of fiscal year 2024 compared to HKD 53,841 thousand in the same period last year[53] - Other losses net amounted to HKD 142,290 thousand in the first half of fiscal year 2024, a significant increase from HKD 25,121 thousand in the same period last year[54] Corporate Governance and Compliance - The company complied with the Corporate Governance Code of the Stock Exchange Listing Rules, except for a deviation from Code Provision C.2.1 regarding the separation of Chairman and CEO roles[76] - The Board of Directors confirmed that all directors adhered to the Standard Code of Conduct for Securities Transactions during the six months ended September 30, 2023[77] - The company appointed PricewaterhouseCoopers as its auditor to review the interim financial information for the six months ended September 30, 2023, in accordance with International Standard on Review Engagements 2410[73] - No significant events occurred after the reporting period that required disclosure[74] Operational Highlights - The company's China brand sales accounted for over 67% of the group's revenue during the review period[36] - Sofa sales volume in China increased by 27.6%, from approximately 419,000 units to 535,000 units[37] - The company's total number of brand专卖店 in China reached 6,888, with a net increase of 417 stores during the review period[37] - The company's store closure rate in China remained at a healthy level of approximately 7.3%[37] - The company employs 27,170 staff as of September 30, 2023, an increase from 25,832 staff as of March 31, 2023[68] - The company repurchased 15,000,000 ordinary shares in May 2023 at a total cost of HKD 80.9115 million, with the repurchased shares subsequently canceled[71][72] - The company plans to continue seeking acquisition opportunities in the furniture sector to accelerate its development[67] - The company is focusing on product innovation, including the development of upgraded functional sofas and smart iron frames with global sales leadership[69] - The company is investing in intelligent manufacturing, digital management, and brand influence to enhance long-term competitiveness[69] Tax and Legal Matters - The company's US corporate tax expense includes federal income tax at a rate of 21% and state income tax ranging from 0% to 9% based on estimated taxable profits[22] - The company's Macau subsidiary is subject to a supplementary income tax rate of 12% on taxable income[22] - The company has a legal claim provision of $18.943 million (equivalent to HKD 148.267 million) classified as current liabilities due to a lawsuit from a former supplier[65] Shareholder and Dividend Information - The company will suspend share transfer registration from November 30, 2023, to December 1, 2023, for the distribution of interim dividends, with payment expected by December 21, 2023[75] Capital and Investments - The company's capital commitments for property, plant, and equipment acquisition and construction were 817,980 thousand HKD as of September 30, 2023[32] - The company's bank loans are denominated in HKD and RMB, with fixed interest rates ranging from 1.35% to 3.50% and floating rates based on HIBOR or EURIBOR plus a spread[31]

Financial Performance - The company reported a significant increase in revenue, achieving a total of HKD 1.2 billion, representing a year-on-year growth of 15%[3] - Total revenue for the fiscal year 2023 was HKD 17,788,864, a decrease of 18.3% compared to HKD 21,787,920 in 2022[21] - Net profit attributable to equity holders was HKD 1,914,914, down 15% from HKD 2,247,491 in the previous year[21] - Basic earnings per share decreased to HKD 48.80 from HKD 56.90 in 2022, reflecting a decline of 14.5%[21] - Proposed final dividend is HKD 10.0 per share, down from HKD 17.0 in 2022, resulting in a payout ratio of 51.2%[21] - The total dividend declared for FY2023 amounted to approximately 51.2% of profit attributable to equity holders, with a final dividend of HKD 0.10 per share and an interim dividend of HKD 0.15 per share[60] Market Expansion and Strategy - The company is expanding its market presence in Southeast Asia, with plans to open 5 new retail locations by the end of the year[3] - The company aims to increase market share in the soft furniture industry, which currently has a low market penetration of around 5%[30] - The shift from export-oriented to brand sales has resulted in over 60% of revenue coming from domestic brand sales[33] - The company is focusing on product differentiation and enhancing marketing strategies to adapt to changing market conditions[35] - The company has been recognized as the global leader in functional sofa sales for five consecutive years[34] Product Development and Innovation - New product development includes the launch of a premium sofa line, expected to contribute an additional HKD 200 million in sales[3] - The group aims to enhance product quality and innovation, focusing on upgraded functional sofas with features such as compact design and zero-gravity capabilities[78] - The company emphasizes continuous product innovation, expanding into smart home products, massage chairs, and customized home solutions[145] - The company has applied for a total of 2,060 design patents, with 1,619 already granted as of March 31, 2023[146] Sustainability and Environmental Initiatives - The management highlighted a focus on sustainability initiatives, aiming for a 30% reduction in carbon emissions by 2025[3] - The company actively implements the national climate change adaptation strategy 2035 and follows TCFD recommendations for climate-related financial disclosures[102] - The company has integrated green and low-carbon development models into its operations to enhance resource efficiency and control emissions[101] - The company aims to reduce hazardous waste generation by 20% in 2023, implementing measures such as reducing cleaning solvent usage and standardizing cleaning operations[140] - The total hazardous waste generated in the fiscal year 2023 was 155.31 tons, while non-hazardous waste amounted to 17,923.56 tons[141] Operational Efficiency - The company is investing HKD 50 million in technology upgrades to improve supply chain efficiency[3] - The group plans to invest more in smart manufacturing and digital management to improve production efficiency and reduce labor costs[78] - The company has established a comprehensive energy management process to improve energy utilization efficiency and control production costs[124] Employee Welfare and Development - The group has 25,832 employees as of March 31, 2023, down from 28,685 employees a year earlier, indicating a reduction of approximately 9.7%[77] - Total employee costs for the fiscal year 2023 were approximately HKD 2,934,144,000, compared to HKD 3,238,391,000 in the previous fiscal year, reflecting a decrease of about 9.4%[77] - The company has established a standard for employee promotion and development based on business needs and employee aspirations[185] - A total of 91 employees received approximately 8,700 thousand HKD in scholarships through the "Books Have Gold" program since its inception in 2010, benefiting 484 employees' children[183] - In the fiscal year 2023, the company provided training for 8,475 employees, totaling 632,403 hours, resulting in an average of 534.36 hours of training per employee[186] Risk Management and Compliance - The company has established a comprehensive risk management system to identify and mitigate potential operational risks[95] - The company has no foreign exchange risk hedging policies in place, exposing it to currency risks primarily from sales in USD, RMB, and HKD[73] - The supplier integrity clause signing rate reached 98% during the reporting period, ensuring compliance with anti-corruption and anti-bribery laws[98] Customer Engagement and Satisfaction - User data indicates a rise in customer engagement, with a 20% increase in online sales compared to the previous year[3] - The company has established a customer complaint handling process to analyze and improve upon customer issues monthly[161] - The company emphasizes quality and customer satisfaction, continuously improving product quality and service levels[158] Financial Health - Cash and cash equivalents increased to HKD 3,738,234 from HKD 2,825,704 in 2022, indicating improved liquidity[21] - The group maintained a current ratio of approximately 1.2 and a capital debt ratio of about 36.1% as of March 31, 2023[64] - The company reported a loss of approximately 241,416 thousand HKD in other gains and losses for the fiscal year 2023, compared to a loss of about 49,350 thousand HKD in the previous year[55]

[Financial Performance Overview](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) [Consolidated Statement of Comprehensive Income](index=2&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The company's total revenue decreased by 18.4% to **HKD 17.79 billion**, with profit attributable to owners declining by 14.8% in FY2023 Key Figures from Consolidated Statement of Comprehensive Income (HKD thousands) | Indicator | FY2023 | FY2022 | Change (%) | | :------------------ | :----------- | :----------- | :--------- | | Total Revenue | 17,788,864 | 21,787,920 | (18.4)% | | Main Business Revenue | 17,351,106 | 21,496,783 | (19.3)% | | Gross Profit | 6,678,267 | 7,890,595 | (15.3)% | | Operating Profit | 2,509,734 | 2,889,530 | (13.1)% | | Profit Before Income Tax | 2,354,872 | 2,819,489 | (16.5)% | | Profit for the Year | 1,858,178 | 2,316,560 | (19.8)% | Profit Attributable to Owners of the Company and Earnings Per Share | Indicator | FY2023 | FY2022 | Change (%) | | :-------------------------------------- | :----------- | :----------- | :--------- | | Profit Attributable to Owners of the Company (HKD thousands) | 1,914,914 | 2,247,491 | (14.8)% | | Basic Earnings Per Share (HK cents) | 48.80 | 56.90 | (14.2)% | | Diluted Earnings Per Share (HK cents) | 48.77 | 56.77 | (14.1)% | [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) Total assets decreased by 4.3% to **HKD 19.64 billion**, driven by a 10.0% decline in current assets, while total liabilities fell by 8.5% Key Figures from Consolidated Statement of Financial Position (HKD thousands) | Indicator | March 31, 2023 | March 31, 2022 | Change (%) | | :------------------ | :------------- | :------------- | :--------- | | Total Assets | 19,640,488 | 20,521,244 | (4.3)% | | Non-current Assets | 11,225,854 | 11,180,502 | 0.4% | | Current Assets | 8,414,634 | 9,340,742 | (10.0)% | | Total Equity | 12,527,770 | 12,748,173 | (1.7)% | | Total Liabilities | 7,112,718 | 7,773,071 | (8.5)% | | Current Liabilities | 6,786,020 | 7,443,677 | (8.8)% | - Inventories within current assets decreased from **HKD 2.70 billion** to **HKD 1.45 billion**, and trade and bills receivables decreased from **HKD 2.25 billion** to **HKD 1.60 billion**[5](index=5&type=chunk) [Notes to the Consolidated Financial Statements](index=6&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [General Information](index=6&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Man Wah Holdings Limited, an investment holding company incorporated in Bermuda, has been listed on the Hong Kong Stock Exchange since April 2010 - The company was incorporated in Bermuda and listed on the Hong Kong Stock Exchange on **April 9, 2010**[8](index=8&type=chunk) - The company is an investment holding company, with its direct and ultimate holding companies owned by Directors Mr. Wong Man Li and Ms. Hui Wai Hing[8](index=8&type=chunk) [Summary of Significant Accounting Policies](index=6&type=section&id=%E9%87%8D%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E6%A6%82%E8%A6%81) Financial statements are prepared under IFRS and Hong Kong Companies Ordinance, primarily on a historical cost basis, with new standards having no material impact - Consolidated financial statements are prepared on a historical cost basis, with financial assets and investment properties at fair value through profit or loss measured at fair value[9](index=9&type=chunk) - The Group adopted several revised standards mandatory for the financial year beginning **April 1, 2022**, with no significant financial impact[10](index=10&type=chunk)[11](index=11&type=chunk) - The potential impact of new and amended standards not yet adopted, including IAS 1, IAS 16, and IAS 37, is currently under assessment[12](index=12&type=chunk)[13](index=13&type=chunk) [Segment Information](index=7&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's operating segments, including sofas and bedding, saw revenue declines in FY2023, with China remaining the largest market despite a 15.9% revenue decrease - The Group's operating and reportable segments include sofas and ancillary products, bedding and ancillary products, other products, other businesses, and Home Group business[14](index=14&type=chunk)[15](index=15&type=chunk) - Executive Directors make decisions based on segment operating results, but do not review segment asset and liability information[16](index=16&type=chunk) [Segment Revenue and Results](index=9&type=section&id=%E5%88%86%E9%83%A8%E6%94%B6%E7%9B%8A%E5%8F%8A%E6%A5%AD%E7%B8%BE) All major segments experienced revenue declines in FY2023, with sofas and ancillary products down 15.9%, and Home Group business recording a loss Segment Revenue (HKD thousands) | Segment | FY2023 | FY2022 | Change (%) | | :----------------------- | :----------- | :----------- | :--------- | | Sofas and Ancillary Products | 12,298,602 | 14,616,557 | (15.9)% | | Bedding and Ancillary Products | 2,726,781 | 3,381,770 | (19.4)% | | Other Products | 1,417,246 | 2,236,450 | (36.6)% | | Other Businesses | 295,903 | 371,128 | (20.3)% | | Home Group Business | 612,574 | 890,878 | (31.2)% | | **Total** | **17,351,106** | **21,496,783** | **(19.3)%** | Segment Results (HKD thousands) | Segment | FY2023 | FY2022 | Change (%) | | :----------------------- | :----------- | :----------- | :--------- | | Sofas and Ancillary Products | 1,840,574 | 2,148,018 | (14.3)% | | Bedding and Ancillary Products | 640,121 | 699,658 | (8.5)% | | Other Products | 51,857 | 202,940 | (74.5)% | | Other Businesses | 175,041 | 197,645 | (11.5)% | | Home Group Business | (40,389) | 7,834 | (615.8)% | | **Total** | **2,667,204** | **3,256,095** | **(18.1)%** | [Geographical Information](index=11&type=section&id=%E5%9C%B0%E5%8D%80%E8%B3%87%E6%96%99) Revenue from China, North America, and Europe declined significantly in FY2023, while non-current assets remain concentrated in China and Vietnam Revenue by Geographical Location of Customers (HKD thousands) | Region | FY2023 | FY2022 | Change (%) | | :--------------------------- | :----------- | :----------- | :--------- | | China (including Hong Kong and Macau) | 11,388,618 | 13,563,935 | (15.9)% | | North America | 4,188,848 | 5,667,477 | (26.1)% | | Europe | 1,149,321 | 1,580,265 | (27.3)% | | Other | 624,319 | 685,106 | (8.8)% | | **Total** | **17,351,106** | **21,496,783** | **(19.3)%** | Non-current Assets by Geographical Location of Assets (HKD thousands) | Region | FY2023 | FY2022 | Change (%) | | :--------------------------- | :----------- | :----------- | :--------- | | China (including Hong Kong and Macau) | 9,606,098 | 9,128,977 | 5.2% | | Europe | 350,795 | 517,468 | (32.2)% | | Vietnam | 1,236,923 | 1,407,038 | (12.1)% | | Other | 2,864 | 85,994 | (96.7)% | | **Total** | **11,196,680** | **11,139,477** | **0.5%** | [Income Tax Expense](index=12&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense decreased by 1.2% to **HKD 496.69 million** in FY2023, with varying corporate tax rates applied across different regions Income Tax Expense (HKD thousands) | Tax Category | FY2023 | FY2022 | Change (%) | | :------------------- | :----------- | :----------- | :--------- | | China Corporate Income Tax | 393,657 | 368,289 | 6.9% | | China Withholding Income Tax | 35,089 | 46,191 | (24.0)% | | Macau Supplementary Income Tax | 27,035 | 60,361 | (55.2)% | | US Corporate Income Tax | 1,698 | 2,444 | (30.5)% | | Deferred Income Tax Expense/(Credit) | 1,197 | (2,418) | (149.5)% | | **Total Income Tax Expense** | **496,694** | **502,929** | **(1.2)%** | - Chinese subsidiaries are taxed at **25%**, with some western region companies enjoying a **15%** preferential rate, while Macau subsidiaries pay **12%** supplementary income tax since **2021**[22](index=22&type=chunk)[23](index=23&type=chunk) [Composition of Operating Profit](index=13&type=section&id=%E7%87%9F%E6%A5%AD%E5%88%A9%E6%BD%A4%E6%A7%8B%E6%88%90) Operating profit in FY2023 was impacted by significant expenses, including **HKD 8.50 billion** in inventory costs and **HKD 2.93 billion** in employee benefits, alongside substantial impairment provisions Items Deducted From/(Credited To) Operating Profit (HKD thousands) | Item | FY2023 | FY2022 | Change (%) | | :------------------- | :----------- | :----------- | :--------- | | Cost of Inventories | 8,502,750 | 11,229,027 | (24.3)% | | Amortization of Intangible Assets | 52,341 | 54,382 | (3.7)% | | Depreciation of Property, Plant and Equipment | 525,088 | 530,839 | (1.1)% | | Depreciation of Right-of-use Assets | 107,086 | 99,312 | 7.8% | | Employee Benefit Expenses | 2,934,144 | 3,238,391 | (9.3)% | | Impairment Provision for Goodwill | 133,753 | – | N/A | | Impairment Provision for Property, Plant and Equipment | 52,534 | – | N/A | | Impairment Provision for Inventories | 12,441 | 1,987 | 526.1% | | Legal and Professional Fees | 193,461 | 64,796 | 198.6% | [Earnings Per Share](index=13&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Profit attributable to owners of the Company was **HKD 1.91 billion**, with basic and diluted EPS at **48.80 HK cents** and **48.77 HK cents** respectively, both declining Earnings Per Share Data | Indicator | FY2023 | FY2022 | | :-------------------------------------- | :----------- | :----------- | | Profit Attributable to Owners of the Company (HKD thousands) | 1,914,914 | 2,247,491 | | Weighted Average Number of Ordinary Shares in Issue (thousands) | 3,924,077 | 3,950,168 | | Basic Earnings Per Share for the Year (HK cents) | 48.80 | 56.90 | | Weighted Average Number of Ordinary Shares in Issue (Diluted) (thousands) | 3,926,080 | 3,958,687 | | Diluted Earnings Per Share for the Year (HK cents) | 48.77 | 56.77 | [Dividends](index=14&type=section&id=%E8%82%A1%E6%81%AF) The company recognized total dividends of **HKD 1.26 billion** in FY2023, with the Board recommending a final dividend of **HKD 0.10 per share** Dividends Recognized (HKD thousands) | Dividend Type | FY2023 | FY2022 | | :--------------- | :--------- | :--------- | | Final Dividend (per share) | HKD 0.17 | HKD 0.16 | | Interim Dividend (per share) | HKD 0.15 | HKD 0.13 | | **Total** | **1,255,538** | **1,147,362** | - The Board recommended a final dividend of **HKD 0.10 per share**, totaling approximately **HKD 392,095 thousand**[27](index=27&type=chunk) - Total dividends declared for FY2023 represented approximately **51.2%** of the profit attributable to owners of the Company[59](index=59&type=chunk) [Trade and Other Receivables and Prepayments](index=14&type=section&id=%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E5%8F%8A%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) Net trade and bills receivables decreased by 28.8% to **HKD 1.60 billion**, while other receivables and prepayments increased by 21.8% in FY2023 Trade and Other Receivables and Prepayments (HKD thousands) | Item | March 31, 2023 | March 31, 2022 | Change (%) | | :------------------- | :------------- | :------------- | :--------- | | Net Trade and Bills Receivables | 1,598,310 | 2,245,088 | (28.8)% | | Other Receivables and Prepayments | 943,908 | 775,074 | 21.8% | | **Total** | **2,542,218** | **3,020,162** | **(15.8)%** | Ageing Analysis of Trade and Bills Receivables (HKD thousands) | Ageing | March 31, 2023 | March 31, 2022 | | :------------- | :------------- | :------------- | | 0 to 90 Days | 1,535,390 | 2,164,387 | | 91 to 180 Days | 41,788 | 64,419 | | Over 180 Days | 21,132 | 16,282 | [Trade and Other Payables and Accrued Expenses](index=15&type=section&id=%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) Trade and bills payables decreased by 17.7% to **HKD 950.94 million**, while a provision of **HKD 84.53 million** was made for a supplier lawsuit, which the Group plans to appeal Trade and Other Payables and Accrued Expenses (HKD thousands) | Item | March 31, 2023 | March 31, 2022 | Change (%) | | :------------------- | :------------- | :------------- | :--------- | | Trade and Bills Payables | 950,941 | 1,155,911 | (17.7)% | | Other Payables and Accrued Expenses | 974,682 | 1,224,626 | (20.4)% | | **Total** | **1,925,623** | **2,380,537** | **(19.2)%** | - The Group made a provision of **HKD 84,528 thousand** for a lawsuit with a former supplier, where the court ruled in favor of the former supplier for **HKD 118,881 thousand**, and the Group will appeal the judgment[31](index=31&type=chunk)[32](index=32&type=chunk)[65](index=65&type=chunk) Ageing Analysis of Trade and Bills Payables (HKD thousands) | Ageing | March 31, 2023 | March 31, 2022 | | :------------- | :------------- | :------------- | | 0 to 90 Days | 950,475 | 1,154,833 | | 91 to 180 Days | 152 | 917 | | Over 180 Days | 314 | 161 | [Market and Business Review](index=16&type=section&id=%E5%B8%82%E5%A0%B4%E8%88%87%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) [Overall Market Environment and Company Strategy](index=16&type=section&id=%E6%95%B4%E9%AB%94%E5%B8%82%E5%A0%B4%E7%92%B0%E5%A2%83%E8%88%87%E5%85%AC%E5%8F%B8%E6%88%B0%E7%95%A5) Amid global economic challenges, the company successfully shifted to a brand-sales-focused model in China, achieving global leadership in functional sofa sales for five consecutive years - Over the past three years, global and Chinese economies were impacted by the pandemic and US-China trade war, affecting both the Chinese market and export orders[34](index=34&type=chunk) - The Group's business model shifted from export OEM to brand sales, with China's brand sales exceeding **60%**[34](index=34&type=chunk) - According to Euromonitor International, the Group has ranked first in global functional sofa sales for **five consecutive years**[35](index=35&type=chunk) [China Market Performance](index=16&type=section&id=%E4%B8%AD%E5%9C%8B%E5%B8%82%E5%A0%B4%E8%A1%A8%E7%8F%BE) China market revenue declined by 15.9% to **HKD 11.09 billion** in FY2023 due to the pandemic, with the company expanding stores and enhancing online sales strategies China Market Main Business Revenue (HKD thousands) | Year | Revenue | | :------------- | :----------- | | FY2023 | 11,092,715 | | FY2022 | 13,192,807 | - The company addressed pandemic impacts by supporting dealers, enhancing live streaming training, driving marketing, improving management, implementing CRM, and building an operational platform[37](index=37&type=chunk) - As of **March 31, 2023**, the Group had **6,471** brand specialty stores in China, with a net increase of **503** stores during the review period[37](index=37&type=chunk) - The Group enhanced online live streaming sales through short video promotion, in-store live streaming, and collaborations with top streamers to boost brand influence and sales conversion[37](index=37&type=chunk) [North America Market Performance](index=17&type=section&id=%E5%8C%97%E7%BE%8E%E5%B8%82%E5%A0%B4%E8%A1%A8%E7%8F%BE) North American revenue declined by 26.1% to **HKD 4.19 billion** due to inflation and high inventory, while the company maintained its third-place ranking in functional sofa sales North America Market Main Business Revenue (HKD thousands) | Year | Revenue | | :------------- | :----------- | | FY2023 | 4,188,848 | | FY2022 | 5,667,477 | - The Group maintained its **third-place** ranking among US functional sofa manufacturers, with a market share of **10.1%**[38](index=38&type=chunk) - To mitigate US tariff impacts, the Group established dual production facilities in Vietnam and Mexico, reducing export risks and transportation costs[39](index=39&type=chunk) [Europe and Other Overseas Market Performance](index=18&type=section&id=%E6%歐%B4%B2%E5%8F%8A%E5%85%B6%E4%BB%96%E6%B5%B7%E5%A4%96%E5%B8%82%E5%A0%B4%E8%A1%A8%E7%8F%BE) Revenue from Europe and other overseas markets (excluding Home Group) declined by 15.5%, while Home Group business revenue fell 31.2%, resulting in a **HKD 133.75 million** goodwill impairment Europe and Other Overseas Market Main Business Revenue (HKD thousands) | Market | FY2023 | FY2022 | | :------------------------------------ | :----------- | :----------- | | Europe and Other Overseas Markets (excluding Home Group) | 1,161,066 | 1,374,493 | | Home Group Business | 612,574 | 890,878 | - Home Group business revenue significantly decreased by **31.2%**, primarily due to the pandemic and the Russia-Ukraine war[40](index=40&type=chunk) - The Group recognized a goodwill impairment provision of **HKD 133,753 thousand** for the Home Group[40](index=40&type=chunk) [Detailed Financial Performance Analysis](index=18&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E8%A9%B3%E7%B4%B0%E5%88%86%E6%9E%90) [Revenue and Gross Margin Analysis](index=18&type=section&id=%E6%94%B6%E5%85%A5%E5%92%8C%E6%AF%9B%E5%88%A9%E7%8E%87%E5%88%86%E6%9E%90) Total revenue declined by 18.4% to **HKD 17.79 billion** in FY2023, yet overall gross margin improved by 1.8 percentage points to **38.5%** Total Revenue and Gross Margin (HKD thousands) | Indicator | FY2023 | FY2022 | Change (%) | | :------------- | :----------- | :----------- | :--------- | | Total Revenue | 17,788,864 | 21,787,920 | (18.4)% | | Overall Gross Margin | 38.5% | 36.7% | 1.8pp | - Excluding Home Group business, the Group's sofa product sales volume decreased by approximately **20.8%** to about **1,502 thousand units**[42](index=42&type=chunk) [Sofas and Ancillary Products Business](index=18&type=section&id=%E6%B2%99%E7%99%BC%E5%8F%8A%E9%85%8D%E5%A5%97%E7%94%A2%E5%93%81%E6%A5%AD%E5%8B%99) Sofas and ancillary products revenue decreased by 15.9% to **HKD 12.30 billion**, while its gross margin improved from **37.3%** to **38.5%** Sofas and Ancillary Products Business Revenue and Gross Margin (HKD thousands) | Indicator | FY2023 | FY2022 | Change (%) | | :------------- | :----------- | :----------- | :--------- | | Revenue | 12,298,602 | 14,616,557 | (15.9)% | | Gross Margin | 38.5% | 37.3% | 1.2pp | [China Market](index=19&type=section&id=%E6%B2%99%E7%99%BC%E5%8F%8A%E9%85%8D%E5%A5%97%E7%94%A2%E5%93%81%E6%A5%AD%E5%8B%99%20-%20%E4%B8%AD%E5%9C%8B%E5%B8%82%E5%A0%B4) China market sofa and ancillary product revenue decreased by 12.5% to **HKD 7.55 billion**, driven by enhanced product competitiveness and multi-channel strategies Sofas and Ancillary Products Business - China Market Revenue (HKD thousands) | Year | Revenue | | :------------- | :----------- | | FY2023 | 7,546,520 | | FY2022 | 8,627,693 | - The company enhanced product competitiveness, empowered dealers, and boosted the "CHEERS" brand influence through online-offline synergy and new media channels like Douyin and live streaming[44](index=44&type=chunk) [North America Market](index=19&type=section&id=%E6%B2%99%E7%99%BC%E5%8F%8A%E9%85%8D%E5%A5%97%E7%94%A2%E5%93%81%E6%A5%AD%E5%8B%99%20-%20%E5%8C%97%E7%BE%8E%E5%B8%82%E5%A0%B4) North American sofa and ancillary product revenue declined by 26.4% to **HKD 3.98 billion**, with the US contributing **HKD 3.78 billion** Sofas and Ancillary Products Business - North America Market Revenue (HKD thousands) | Year | Revenue | | :------------- | :----------- | | FY2023 | 3,981,267 | | FY2022 | 5,410,362 | - In North American market revenue, the US contributed **HKD 3,780,639 thousand**, and Canada contributed **HKD 192,619 thousand**[45](index=45&type=chunk) [Europe and Other Overseas Markets](index=19&type=section&id=%E6%B2%99%E7%99%BC%E5%8F%8A%E9%85%8D%E5%A5%97%E7%94%A2%E5%93%81%E6%A5%AD%E5%8B%99%20-%20%E6%AD%90%E6%B4%B2%E5%8F%8A%E5%85%B6%E4%BB%96%E6%B5%B7%E5%A4%96%E5%B8%82%E5%A0%B4) Sofa and ancillary product sales revenue in Europe and other overseas markets increased by 33.2% to **HKD 770.82 million** Sofas and Ancillary Products Business - Europe and Other Overseas Markets Revenue (HKD thousands) | Year | Revenue | | :------------- | :----------- | | FY2023 | 770,815 | | FY2022 | 578,502 | [Bedding and Ancillary Products Business](index=20&type=section&id=%E5%BA%8A%E5%85%B7%E5%8F%8A%E9%85%8D%E5%A5%97%E7%94%A2%E5%93%81%E6%A5%AD%E5%8B%99) Bedding and ancillary products revenue decreased by 19.4% to **HKD 2.73 billion**, while its gross margin improved from **40.8%** to **44.5%** Bedding and Ancillary Products Business Revenue and Gross Margin (HKD thousands) | Indicator | FY2023 | FY2022 | Change (%) | | :------------- | :----------- | :----------- | :--------- | | Revenue | 2,726,781 | 3,381,770 | (19.4)% | | Gross Margin | 44.5% | 40.8% | 3.7pp | [Other Product Sales](index=20&type=section&id=%E5%85%B6%E4%BB%96%E7%94%A2%E5%93%81%E9%8A%B7%E5%94%AE) Other product sales revenue declined by 36.6% to **HKD 1.42 billion**, with gross margin decreasing from **24.0%** to **22.9%** Other Product Sales Revenue and Gross Margin (HKD thousands) | Indicator | FY2023 | FY2022 | Change (%) | | :------------- | :----------- | :----------- | :--------- | | Revenue | 1,417,246 | 2,236,450 | (36.6)% | | Gross Margin | 22.9% | 24.0% | (1.1)pp | [Home Group Business](index=20&type=section&id=Home%E9%9B%86%E5%9C%98%E6%A5%AD%E5%8B%99) Home Group business revenue decreased by 31.2% to **HKD 612.57 million**, with its gross margin declining from **25.3%** to **23.5%** Home Group Business Revenue and Gross Margin (HKD thousands) | Indicator | FY2023 | FY2022 | Change (%) | | :------------- | :----------- | :----------- | :--------- | | Revenue | 612,574 | 890,878 | (31.2)% | | Gross Margin | 23.5% | 25.3% | (1.8)pp | [Other Businesses](index=20&type=section&id=%E5%85%B6%E4%BB%96%E6%A5%AD%E5%8B%99) Other businesses revenue decreased by 20.3% to **HKD 295.90 million**, while its gross margin significantly improved from **79.9%** to **88.3%** Other Businesses Revenue and Gross Margin (HKD thousands) | Indicator | FY2023 | FY2022 | Change (%) | | :------------- | :----------- | :----------- | :--------- | | Revenue | 295,903 | 371,128 | (20.3)% | | Gross Margin | 88.3% | 79.9% | 8.4pp | [Other Income](index=20&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income significantly increased by 50.4% to **HKD 437.76 million** in FY2023 Other Income (HKD thousands) | Year | Revenue | | :------------- | :----------- | | FY2023 | 437,758 | | FY2022 | 291,137 | [Cost and Expense Analysis](index=21&type=section&id=%E6%88%90%E6%9C%AC%E8%88%87%E9%96%8B%E6%94%AF%E5%88%86%E6%9E%90) Cost of goods sold decreased by 21.6% due to lower raw material costs, while other losses expanded significantly due to impairment provisions [Cost of Goods Sold](index=21&type=section&id=%E5%B7%B2%E5%94%AE%E5%95%86%E5%93%81%E6%88%90%E6%9C%AC) Cost of goods sold decreased by 21.6% to **HKD 10.67 billion**, mainly driven by a 24.8% reduction in raw material costs across key materials Cost of Goods Sold Analysis (HKD thousands) | Item | FY2023 | FY2022 | Change (%) | | :------------- | :----------- | :----------- | :--------- | | Raw Material Costs | 8,268,801 | 10,990,545 | (24.8)% | | Staff Costs | 1,779,759 | 1,976,527 | (10.0)% | | Production Expenses | 624,279 | 639,116 | (2.3)% | | **Total** | **10,672,839** | **13,606,188** | **(21.6)%** | Year-on-Year Change in Average Unit Cost of Major Raw Materials | Major Raw Material | Year-on-Year Change (%) | | :----------------- | :---------------------- | | Genuine Leather | (9.5)% | | Steel | (17.0)% | | Plywood | (7.7)% | | Printed Fabric | (7.8)% | | Chemicals | (17.4)% | | Packaging Paper | (2.4)% | [Other Gains and Losses](index=21&type=section&id=%E5%85%B6%E4%BB%96%E6%90%8D%E7%9B%8A) Other gains and losses expanded significantly to a **HKD 241.42 million** loss, primarily due to goodwill and fixed asset impairment provisions Other Gains and Losses (HKD thousands) | Year | Loss | | :------------- | :----------- | | FY2023 | (241,416) | | FY2022 | (49,350) | - The expanded loss was mainly attributable to goodwill and fixed asset impairment provisions[54](index=54&type=chunk) [Selling and Distribution Expenses](index=22&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) Selling and distribution expenses decreased by 20.8% to **HKD 3.32 billion**, driven by lower overseas transportation costs and US tariffs, despite increased network service fees Selling and Distribution Expenses (HKD thousands) | Year | Expense | | :------------- | :----------- | | FY2023 | 3,317,923 | | FY2022 | 4,189,944 | - Advertising, marketing, and brand building expenses decreased by **15.4%** to **HKD 463,774 thousand**[55](index=55&type=chunk) - Staff costs, benefits, and commissions for sales personnel decreased by **2.1%** to **HKD 784,873 thousand**[55](index=55&type=chunk) - Overseas transportation and port charges decreased by **39.6%** to **HKD 793,773 thousand**[55](index=55&type=chunk) - Tariffs on goods exported to the US decreased by **47.4%** to **HKD 91,042 thousand**[55](index=55&type=chunk) - Network service fees increased by **24.2%** to **HKD 153,661 thousand**[55](index=55&type=chunk) [Administrative and Other Expenses](index=23&type=section&id=%E8%A1%8C%E6%94%BF%E5%8F%8A%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) Administrative and other expenses slightly decreased by 0.6% to **HKD 1.05 billion**, but their proportion of revenue increased from **4.9%** to **6.0%** Administrative and Other Expenses (HKD thousands) | Year | Expense | | :------------- | :----------- | | FY2023 | 1,046,952 | | FY2022 | 1,052,908 | - Administrative and other expenses as a percentage of revenue increased from approximately **4.9%** in FY2022 to approximately **6.0%** in FY2023[56](index=56&type=chunk) [Income Tax Expense](index=23&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7%20-%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense decreased by 1.2% to **HKD 496.69 million**, yet its proportion of profit before tax increased from **17.8%** to **21.1%** Income Tax Expense (HKD thousands) | Year | Expense | | :------------- | :----------- | | FY2023 | 496,694 | | FY2022 | 502,929 | - Income tax expense as a percentage of profit before tax increased from approximately **17.8%** in FY2022 to approximately **21.1%** in FY2023[57](index=57&type=chunk) [Profitability and Dividend Policy](index=23&type=section&id=%E7%9B%88%E5%88%A9%E8%83%BD%E5%8A%9B%E8%88%87%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) Profit attributable to owners decreased by 14.8%, but net profit margin improved to **11.0%** due to higher gross margin, with total dividends representing **51.2%** of profit [Profit Attributable to Owners of the Company and Net Profit Margin](index=23&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%AC%8A%E7%9B%8A%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%BA%A2%E5%88%A9%E5%8F%8A%E6%B7%A8%E5%88%A9%E6%BD%A4%E7%8E%87) Profit attributable to owners decreased by 14.8% to **HKD 1.91 billion**, while net profit margin improved to **11.0%** due to an increased gross margin Profit Attributable to Owners of the Company and Net Profit Margin | Indicator | FY2023 | FY2022 | | :-------------------------------------- | :----------- | :----------- | | Profit Attributable to Owners of the Company (HKD thousands) | 1,914,914 | 2,247,491 | | Net Profit Margin | 11.0% | 10.5% | - The net profit margin increase was primarily due to the gross margin rising from approximately **36.7%** in FY2022 to approximately **38.5%** in FY2023[58](index=58&type=chunk) [Dividends](index=23&type=section&id=%E7%9B%88%E5%88%A9%E8%83%BD%E5%8A%9B%E8%88%87%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96%20-%20%E8%82%A1%E6%81%AF) The Board recommended a final dividend of **HKD 0.10 per share**, with total dividends representing approximately **51.2%** of the profit attributable to owners - The Board recommended declaring a final dividend of **HKD 0.10 per share**[59](index=59&type=chunk) - Total dividends declared for FY2023 represented approximately **51.2%** of the profit attributable to owners of the Company[59](index=59&type=chunk) [Liquidity and Capital Management](index=23&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E8%88%87%E8%B3%87%E6%9C%AC%E7%AE%A1%E7%90%86) [Working Capital](index=23&type=section&id=%E7%87%9F%E9%81%8B%E8%B3%87%E9%87%91) Cash and bank balances increased by 32.0% to **HKD 3.74 billion**, primarily in RMB, reflecting sound financial management and capital commitment control Cash and Bank Balances (HKD thousands) | Year | Amount | | :------------- | :----------- | | March 31, 2023 | 3,738,234 | | March 31, 2022 | 2,831,559 | - Cash and bank balances are primarily denominated in RMB, totaling approximately **HKD 3,540,054 thousand**[60](index=60&type=chunk) - The Group maintains sound financial policies, effectively managing cash flow and capital commitments to ensure sufficient funds for current and future needs[60](index=60&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E6%9C%AC%E4%BE%86%E6%BA%90) Short-term borrowings were **HKD 4.18 billion**, with a current ratio of **1.2** and a gearing ratio of **36.1%**, reflecting a mix of fixed and floating rate bank loans Borrowings (HKD thousands) | Borrowing Type | March 31, 2023 | March 31, 2022 | | :------------- | :------------- | :------------- | | Short-term Borrowings | 4,176,079 | 4,335,016 | | Long-term Borrowings | 350 | 566 | Liquidity Ratios | Indicator | March 31, 2023 | March 31, 2022 | | :------------- | :------------- | :------------- | | Current Ratio | 1.2 | 1.3 | | Gearing Ratio | 36.1% | 37.0% | - The weighted average effective annual interest rate for bank borrowings was **4.40%** (2022: 1.48%) for floating rates and **2.74%** (2022: 2.72%) for fixed rates[61](index=61&type=chunk) [Treasury Management Policy](index=24&type=section&id=%E8%B3%87%E9%87%91%E7%AE%A1%E7%90%86%E6%94%BF%E7%AD%96) The Group invests surplus cash in low-risk, short-term principal-protected products to generate returns without impacting operations or capital expenditures - The Group invests surplus cash reserves in low-risk, short-term (usually not exceeding one year) principal-protected wealth management products, structured deposits, or ordinary fixed deposits[62](index=62&type=chunk) - The treasury management objective is to generate returns without disrupting the Group's business operations or capital expenditures[62](index=62&type=chunk) [Asset Impairment and Pledges](index=24&type=section&id=%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E8%88%87%E6%8A%B5%E6%8A%BC) The Group recognized **HKD 12.44 million** in inventory impairment and **HKD 14.58 million** in receivables impairment, with some Home Group assets pledged for financing [Inventory Provisions](index=24&type=section&id=%E5%AD%98%E8%B2%A8%E6%92%A5%E5%82%99) Inventory impairment provisions significantly increased to **HKD 12.44 million** in FY2023 Inventory Impairment Provisions (HKD thousands) | Year | Amount | | :------------- | :----------- | | FY2023 | 12,441 | | FY2022 | 1,987 | [Impairment Loss on Trade and Bills Receivables](index=24&type=section&id=%E6%87%89%E6%94%B6%E8%B3%87%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A%E6%B8%9B%E5%80%BC%E虧%E6%90%8D) Impairment loss provisions for trade and bills receivables decreased to **HKD 14.58 million** in FY2023 Impairment Loss Provisions for Trade and Bills Receivables (HKD thousands) | Year | Amount | | :------------- | :----------- | | FY2023 | 14,578 | | FY2022 | 19,825 | [Pledged Assets](index=25&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) Restricted bank balances were **HKD 7.39 million**, and Home Group subsidiaries pledged **HKD 871 thousand** in property, plant, and equipment for financing Restricted Bank Balances (HKD thousands) | Year | Amount | | :------------- | :----------- | | March 31, 2023 | 7,394 | | March 31, 2022 | 4,045 | - Certain Home Group subsidiaries pledged property, plant, and equipment with a carrying amount of approximately **HKD 871 thousand** for financing[64](index=64&type=chunk) [Capital Commitments and Contingent Liabilities](index=15&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) Capital commitments totaled **HKD 969.82 million** for property and plant, with no significant contingent liabilities, though a **HKD 84.53 million** provision was made for a supplier lawsuit Capital Commitments (HKD thousands) | Item | March 31, 2023 | March 31, 2022 | Change (%) | | :--------------------------------- | :------------- | :------------- | :--------- | | Acquisition and Construction of Property, Plant and Equipment | 409,563 | 306,116 | 33.8% | | Construction of Production Plants | 558,073 | 1,037,613 | (46.2)% | | Construction of Properties Under Development | 2,182 | 5,603 | (61.0)% | | **Total** | **969,818** | **1,349,332** | **(28.1)%** | - The Group had no significant contingent liabilities[65](index=65&type=chunk) - The Group made a provision of **HKD 84,528 thousand** for a lawsuit with a former supplier, where the court ruled in favor of the former supplier for **HKD 118,881 thousand**, and the Group will appeal the judgment[31](index=31&type=chunk)[32](index=32&type=chunk)[65](index=65&type=chunk) [Foreign Exchange Risk](index=25&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group faces currency risk from various foreign currency-denominated transactions across its global operations, with no current foreign exchange hedging policy - The Group's currency risk primarily arises from trade and other receivables, bank balances, trade and other payables, and bank borrowings denominated in non-functional currencies[66](index=66&type=chunk) - Overseas market sales are predominantly settled in **USD**, mainland China in **RMB**, and Hong Kong in **HKD**, while Home Group revenue is in **EUR** with costs in **EUR, UAH, and PLN**[66](index=66&type=chunk) - The Group has no foreign exchange hedging policy[66](index=66&type=chunk) [Significant Investments and Acquisitions](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%92%8C%E6%94%B6%E8%B3%BC) The Group made no significant investments or acquisitions in FY2023 but plans to pursue future furniture company acquisitions for accelerated development - In FY2023, the Group did not undertake any significant investments, major acquisitions, or disposals of subsidiaries, associates, or joint ventures[67](index=67&type=chunk) - The Group will continue to seek suitable opportunities to acquire furniture companies to accelerate its development[67](index=67&type=chunk) [Operations and Strategic Outlook](index=26&type=section&id=%E9%81%8B%E7%87%9F%E8%88%87%E6%88%B0%E7%95%A5%E5%B1%95%E6%9C%9B) [Future Major Investment or Capital Asset Plans](index=26&type=section&id=%E6%9C%AA%E4%BE%86%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E8%A8%88%E5%8A%83) The Group currently has no annual plans for future major investments or capital assets - The Group currently has no plans for major investments or capital assets for the coming year[68](index=68&type=chunk) [Human Resources](index=26&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) Employee count decreased by 9.9% to **25,832**, with total employee costs at **HKD 2.93 billion**, while the company focuses on training, performance, and incentive schemes Employee Count and Costs (HKD thousands) | Indicator | March 31, 2023 | March 31, 2022 | Change (%) | | :------------- | :------------- | :------------- | :--------- | | Total Employees | 25,832 | 28,685 | (9.9)% | | Total Employee Costs | 2,934,144 | 3,238,391 | (9.3)% | - The Group provides comprehensive working and living conditions, with a robust employee training, performance evaluation, and incentive system, including share option and share award schemes[68](index=68&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) The company repurchased **11.65 million** ordinary shares for approximately **HKD 58.96 million** in FY2023, with no other share transactions Share Repurchase Details (October 2022) | Month of Repurchase | Number | Highest (HKD) | Lowest (HKD) | Total Purchase Price (approx. HKD) | | :------------------ | :----------- | :------------ | :----------- | :--------------------------------- | | October 2022 | 11,647,600 | 5.30 | 4.83 | 58,958,729 | - Save for the aforementioned repurchases, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the review period[69](index=69&type=chunk) [Future Plans and Outlook](index=27&type=section&id=%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83%E8%88%87%E5%B1%95%E6%9C%9B) The Group will pursue a "Product + Brand" strategy, focusing on R&D, smart manufacturing, and digital management, while expanding market share in China and overseas - The Group will adhere to its "Product + Brand" core strategy, enhancing R&D for upgraded functional sofas (compact, aesthetic, lightweight, flat-reclining) using self-produced smart iron frame technology[71](index=71&type=chunk) - Investment will increase in smart manufacturing, digital management, and brand influence, aiming to reduce labor intensity and production costs through automated integrated production processes[71](index=71&type=chunk) - The Group will continue its "Dominating China" strategy to increase market share and leverage scaled production, quality, and cost advantages to expand in European and American markets as demand recovers[72](index=72&type=chunk) - The Chinese functional sofa market remains in a stage of low penetration with high growth potential[72](index=72&type=chunk) [Corporate Governance and Administrative Matters](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E8%88%87%E8%A1%8C%E6%94%BF%E4%BA%8B%E9%A0%85) [Significant Events After Review Period](index=28&type=section&id=%E5%9B%9E%E9%A1%A7%E6%9C%9F%E5%BE%8C%E7%9A%84%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) As of the announcement date, the Directors are unaware of any significant disclosable events occurring after **March 31, 2023** - As of this announcement date, the Directors are unaware of any significant disclosable events occurring after **March 31, 2023**[73](index=73&type=chunk) [Corporate Governance Practices](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The company adheres to corporate governance best practices and the Listing Rules' code, with the Chairman and CEO roles combined, but the Board ensures power balance through independent directors and committee consultations - The Company adheres to corporate governance best practices and complied with the Corporate Governance Code in Appendix 14 of the Listing Rules during the review period[74](index=74&type=chunk)[75](index=75&type=chunk) - Mr. Wong Man Li holds both Chairman and CEO roles, a deviation from Code Provision A.2.1, but the Board ensures power balance through consultations and four independent non-executive directors[75](index=75&type=chunk) [Standard Code for Securities Transactions](index=29&type=section&id=%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company adopted the Standard Code for Directors' securities transactions, with all Directors and relevant employees confirming full compliance - The Company adopted the Standard Code in Appendix 10 of the Listing Rules as the code of conduct for Directors' securities transactions[76](index=76&type=chunk) - All Directors and relevant employees confirmed full compliance with the Standard Code upon inquiry[76](index=76&type=chunk) [Audit Committee](index=29&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, composed of four independent non-executive directors, including two with financial expertise, reviewed the FY2023 audited consolidated results with external auditors - The Audit Committee comprises four independent non-executive directors: Mr. Chow Cheuk Ay, Mr. Yeung Siu Sun, Mr. Ding Yuan, and Mr. Kan Chung Nin[77](index=77&type=chunk) - Mr. Chow Cheuk Ay and Mr. Yeung Siu Sun possess the professional qualifications and financial management expertise required by the Listing Rules[77](index=77&type=chunk) - The Audit Committee reviewed the Group's audited consolidated results for the financial year ended **March 31, 2023**, with the external auditor[77](index=77&type=chunk) [Suspension of Share Register Closure](index=29&type=section&id=%E6%9A%AB%E5%81%9C%E8%BE%A6%E7%90%86%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98) Share transfer registration will be suspended from **June 26-30** and **July 6-10, 2023**, to determine eligibility for the AGM and proposed final dividend - Share transfer registration will be suspended from **June 26 to June 30, 2023**, to determine eligibility for attending and voting at the Annual General Meeting[78](index=78&type=chunk) - Share transfer registration will be suspended from **July 6 to July 10, 2023**, to determine shareholders' eligibility for the proposed final dividend[79](index=79&type=chunk) [Auditor's Scope of Work](index=30&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%B7%A5%E4%BD%9C%E7%AF%84%E5%9C%8D) PricewaterhouseCoopers confirmed consistency between this announcement's financial data and the audited FY2023 statements, but their work does not constitute an assurance engagement - PricewaterhouseCoopers confirmed that the consolidated financial data in this announcement is consistent with the Group's audited consolidated financial statements for **FY2023**[80](index=80&type=chunk) - PricewaterhouseCoopers' work does not constitute an assurance engagement, thus no assurance is provided on this announcement[80](index=80&type=chunk) [Board Information](index=30&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E4%BF%A1%E6%81%AF) This announcement is signed by Chairman Mr. Wong Man Li, with a Board comprising five executive directors and four independent non-executive directors - This announcement is signed by Mr. Wong Man Li, Chairman of the Board[81](index=81&type=chunk) - Executive directors include Mr. Wong Man Li, Ms. Hui Wai Hing, Mr. Alan Marnie, Mr. Dai Quan Fa, and Ms. Wong Ying Ying[81](index=81&type=chunk) - Independent non-executive directors include Mr. Chow Cheuk Ay, Mr. Kan Chung Nin, Mr. Ding Yuan, and Mr. Yeung Siu Sun[81](index=81&type=chunk)