Revenue Performance - For the year ended December 31, 2022, the total revenue from the sale of elastic fabric, lace, and elastic webbing was HKD 4,492,790,000, a decrease from HKD 4,792,661,000 in 2021, representing a decline of approximately 6.3%[12][15] - Total revenue for the year ended December 31, 2022, was HKD 3,171.73 million, a decrease from HKD 3,347.61 million in 2021, representing a decline of approximately 5.25%[36] - Total sales revenue for the year ended December 31, 2022, decreased by approximately 6.3% to about HKD 4,492.8 million, compared to HKD 4,792.7 million for the year ended December 31, 2021[57] - The group's revenue for the year ended December 31, 2022, was approximately HKD 4,492.8 million, a decrease of about 6.3% compared to the previous year[175] Profitability - The net profit attributable to the owners of the company for the year was HKD 299,199,000, down from HKD 401,794,000 in 2021, indicating a decrease of approximately 25.5%[26] - The company's operating profit for the year was HKD 343,161,000, compared to HKD 535,063,000 in the previous year, showing a decline of approximately 35.9%[15] - The overall gross profit decreased from approximately HKD 1,111.8 million in 2021 to about HKD 849.9 million in 2022, with a gross profit margin decline of approximately 4.3 percentage points[68] - The net profit margin for the year ended December 31, 2022, was approximately 6.3%, a decrease of about 2.1 percentage points from the previous year[175] Dividends - The company proposed a final dividend of HKD 0.0422 per share, totaling approximately HKD 43.9 million, subject to shareholder approval at the upcoming annual general meeting[25] - The company declared an interim dividend of HKD 0.0728 per share for 2022, compared to HKD 0.075 per share in 2021, reflecting a decrease of approximately 2.67%[42] - The board has proposed a final dividend of HKD 0.0422 per share for the year ended December 31, 2022, down from HKD 0.118 per share in 2021[154] Costs and Expenses - The cost of sales totaled HKD 3,642.9 million in 2022, a decrease of HKD 37.9 million or 1.0% compared to HKD 3,680.8 million in 2021[65] - Raw material costs accounted for 51.1% of total sales costs in 2022, up from 50.0% in 2021, reflecting a rise in material prices[65] - Selling and distribution expenses represented approximately 4.1% of total revenue in 2022, a slight decrease from 4.2% in 2021, due to better cost management[71] - Administrative expenses decreased to about 6.4% of total revenue in 2022 from 7.0% in 2021, attributed to improved cost management[72] Assets and Liabilities - Non-current liabilities decreased significantly from HKD 820,229,000 in 2021 to HKD 233,264,000 in 2022, a reduction of approximately 71.5%[5] - The total equity of the company as of December 31, 2022, was HKD 3,138,447,000, down from HKD 3,373,246,000 in 2021, reflecting a decrease of about 6.9%[5] - The company's total liabilities decreased to HKD 2,098.20 million in 2022 from HKD 2,160.40 million in 2021, a reduction of about 2.87%[30] - Total assets less current liabilities amounted to HKD 3,371.7 million as of December 31, 2022, compared to HKD 4,193.5 million in the previous year[178] Employee Costs - The company reported a total employee cost of HKD 862,819,000 for 2022, a decrease from HKD 918,704,000 in 2021, representing a reduction of approximately 6.1%[19] - The company employed a total of 9,050 full-time employees as of December 31, 2022, compared to 8,957 employees as of December 31, 2021[114] Cash Flow and Investments - Operating cash flow for the year ended December 31, 2022, was approximately HKD 773.6 million, an increase of about HKD 250.9 million from HKD 522.7 million for the year ended December 31, 2021[58] - The net cash used in investing activities was approximately HKD 174.2 million in 2022, down from HKD 414.3 million in 2021[107] - The company continues to invest approximately HKD 387.2 million in property, plant, and equipment to support long-term growth[107] Market Conditions - The macroeconomic environment is expected to remain challenging in 2023, with continued inventory optimization by most retailers[51] - The global inflation rate was reported at 8.8% in 2022, impacting overall economic conditions and consumer confidence[80] - The group expects global GDP growth to slow to 2.9% in 2023, with a rebound to 3.1% in 2024, below the historical average of 3.8%[147] Future Outlook - The company plans to continue focusing on cost control and optimizing production efficiency to combat current economic challenges[52] - The company plans to expand its production capacity in Hai Duong Province, Vietnam, due to increased customer interest[87] - The company plans to continue investing in innovation and R&D to meet the growing demand for innovative sportswear and apparel products[121]

Financial Performance - Best Pacific reported a sales revenue of approximately HK$2,278.5 million for the six months ended June 30, 2022, representing a growth of approximately 9.7% compared to the same period in 2021[13]. - Overall sales revenue for the first half of 2022 reached approximately HK$2,278.5 million, representing a growth of about 9.7% compared to the same period in 2021[15]. - Revenue for the six months ended June 30, 2022, was HK$2,278,466, an increase of 9.8% compared to HK$2,076,272 for the same period in 2021[160]. - Profit for the period attributable to owners of the Company was HK$168,384, down from HK$175,230 in the same period last year, representing a decrease of 3.8%[161]. - Basic earnings per share for the period was 16.19 HK cents, compared to 16.85 HK cents for the same period in 2021, reflecting a decline of 3.9%[160]. - The Group's gross profit for the reporting period amounted to approximately HK$456.1 million, a decrease of approximately 10.0% compared to the six months ended June 30, 2021[28]. - Gross profit for the period was HK$456,083, a decrease of 10.1% from HK$507,035 in the previous year[160]. - The net profit margin for the reporting period was approximately 7.4%, a decrease of approximately 0.7 percentage point compared to 8.1% for the same period in 2021[28]. Revenue Breakdown - Revenue from the sales of elastic fabric increased by approximately 11.4% to approximately HK$1,720.7 million, while revenue from elastic webbing sales rose by approximately 6.3% to approximately HK$519.3 million[27]. - Revenue for the six months ended June 30, 2022, included HK$1,720,740,000 from elastic fabric sales and HK$519,279,000 from elastic webbing sales[199]. - The revenue from elastic fabric for sportswear and apparel was HK$1,046,714,000, while lingerie sales contributed HK$674,026,000[199]. - Domestic sales revenue of the sportswear and apparel fabric segment achieved an encouraging growth of approximately 38.1%[27]. Cost and Profitability - The gross profit margin decreased by approximately 4.4 percentage points to approximately 20.0% for the reporting period[28]. - The significant increase in raw material costs has negatively impacted the Group's gross profit and gross profit margin for the reporting period[28]. - Cost of sales for the six months ended June 30, 2022, amounted to approximately HK$1,822.4 million, representing an increase of approximately HK$253.1 million or approximately 16.1% compared to the six months ended June 30, 2021[47]. - Raw materials cost increased by approximately 26.4%, contributing to 51.8% of the total cost of sales during the Reporting Period[47]. Economic Environment - The U.S. experienced a negative GDP growth of 1.6% and 0.6% in the first and second quarters of 2022, respectively, raising concerns about a potential recession[12]. - China's GDP growth was recorded at 4.8% and 0.4% for the first and second quarters of 2022, respectively, negatively impacted by lockdown measures due to the resurgence of COVID-19[12]. - The inflation rate in the U.S. reached 9.1% for the first half of 2022, driven by rising food and fuel prices due to geopolitical tensions[12]. - The macroeconomic environment in the first half of 2022 forced households to allocate a larger portion of disposable income to daily necessities[13]. - The textile and apparel sector faced volatility due to international geopolitical tensions and global economic headwinds[12]. Strategic Initiatives - Best Pacific is committed to further penetrating its existing customer base to sustain growth[13]. - The company continues to innovate and maintain high product quality to meet customer expectations[13]. - The Group plans to continue strengthening its innovation and R&D capabilities to meet rising customer demand for innovative apparel products[100]. - The Group aims to capture more market share, particularly in the sportswear and apparel business segment, leveraging its recent growth in domestic sales[100]. - The Group is committed to a multi-location manufacturing strategy and will explore opportunities for production capacity expansion both domestically and internationally[101]. - The Group emphasizes risk management and agility in response to ongoing market challenges, including elevated inflation and high living costs[99]. Cash Flow and Financial Position - Net cash generated from operating activities increased to approximately HK$274.8 million for the six months ended June 30, 2022, compared to approximately HK$255.9 million for the same period in 2021[82]. - Net cash used in investing activities rose to approximately HK$198.9 million for the six months ended June 30, 2022, from approximately HK$97.0 million for the same period in 2021, primarily for the purchase of property, plant, and equipment[83]. - Net cash used in financing activities increased to approximately HK$41.0 million for the six months ended June 30, 2022, compared to approximately HK$13.6 million for the same period in 2021, mainly for repayment of borrowings and interests[84]. - The Group's net gearing ratio was approximately 29.3% as of June 30, 2022, compared to approximately 28.9% as of December 31, 2021[85]. - The effective tax rate decreased to approximately 11.1% for the six months ended June 30, 2022, from approximately 13.6% for the same period in 2021, mainly due to increased profit contributions from overseas subsidiaries with better tax incentives[78]. Shareholding and Corporate Governance - As of June 30, 2022, Grandview Capital Investment Limited held 637,500,000 ordinary shares, representing approximately 61.30% of the company's total shareholding[122]. - The company has complied with the Corporate Governance Code throughout the six months ended June 30, 2022[135]. - The company entered into a facility agreement for a syndicated loan comprising HK$1.8 billion equivalent multicurrency term loan and revolving credit facilities, maturing in 42 months from the first drawdown[140]. - The company has adopted a securities dealing code for senior management and relevant employees to ensure compliance with the Model Code[139]. Dividend and Financial Reporting - The Board declared an interim dividend of HK7.28 cents per ordinary share for the six months ended 30 June 2022[145]. - The interim dividend is expected to be paid on 30 November 2022 to shareholders registered by 19 September 2022[145]. - The unaudited condensed consolidated results for the six months ended June 30, 2022 were reviewed by Deloitte Touche Tohmatsu[152]. - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34, ensuring compliance with relevant provisions[152].

Economic Performance - The global GDP was estimated to increase by 5.9% in 2021, compared to a decrease of 3.1% in 2020, indicating a strong economic recovery[11] - The GDP of advanced economies was estimated to increase by 5.0% and emerging markets by 6.5% in 2021, with the U.S. and China experiencing GDP growth of 5.7% and 8.1% respectively[18] - The IMF revised the projected global GDP growth for 2022 down by 0.5 percentage points to 4.4%, compared to an estimated 5.9% growth in 2021[126] - China's GDP growth is projected to slow from 8.1% in 2021 to 5.5% in 2022 due to pandemic-related disruptions and declining real estate investment[126] Company Performance - The overall Group's revenue increased by approximately 37.2% in 2021, reaching a historical high[22] - The company observed a strong rebound in market demands for consumer goods, particularly in sportswear and health products, driven by increased health consciousness among the public[11] - The company’s performance in the sportswear and fabric business segments has shown continuous growth, supported by the rising consumer demand[11] - Sales revenue of the sportswear and apparel fabric materials segment rose to approximately HK$2,438.9 million, representing a year-on-year growth of approximately 43.8%[22] - The elastic webbing segment recorded a year-on-year growth of approximately 44.2% in 2021[22] - For the year ended December 31, 2021, revenue amounted to approximately HK$4,792.7 million, representing an increase of approximately HK$1,298.4 million, or approximately 37.2%, from approximately HK$3,494.3 million for the year ended December 31, 2020[41] - Revenue from sales of elastic fabric amounted to approximately HK$3,622.7 million, representing an increase of approximately HK$961.8 million, or approximately 36.1%, compared to the previous year[46] - Sales revenue from the sportswear and apparel segment increased from approximately HK$1,696.0 million for the year ended December 31, 2020, to approximately HK$2,438.9 million for the year ended December 31, 2021, representing a year-on-year increase of approximately 43.8%[46] - Revenue from lingerie fabric materials increased from approximately HK$965.0 million for the year ended December 31, 2020, to approximately HK$1,183.8 million for the year ended December 31, 2021, representing a year-on-year increase of approximately 22.7%[47] - The Group recorded a net profit of approximately HK$401.3 million for the year ended 31 December 2021, representing an increase of approximately 61.0% compared to approximately HK$249.2 million for the year ended 31 December 2020[66] - The net profit margin for the year ended 31 December 2021 was approximately 8.4%, an increase of approximately 1.3 percentage points compared to the previous year[66] Cost and Expenses - The company faced cost pressures in 2021 due to nearly doubling fossil fuel prices and rising costs of oil by-products and chemical raw materials[36] - The overall production costs increased due to inflation and rising staff costs across different manufacturing locations[36] - The Group's cost of sales for the year ended 31 December 2021 amounted to approximately HK$3,680.8 million, representing an increase of approximately HK$1,029.9 million, or approximately 38.9%, compared to the year ended 31 December 2020[56] - The increase in cost of sales was primarily due to the increase in overall sales volume and rising prices of most commodities, including main raw materials[56] - The Group was able to partly digest increased costs through better economies of scale and cooperative discussions with customers on product price adjustments[56] Cash Flow and Financial Position - Net cash generated from operating activities decreased from approximately HK$754.2 million in 2020 to approximately HK$522.7 million in 2021[100] - Net cash used in investing activities increased to approximately HK$414.3 million in 2021 from approximately HK$212.7 million in 2020[100] - Net cash used in financing activities rose to approximately HK$363.9 million in 2021, compared to approximately HK$47.8 million in 2020[100] - The Group's net debt position was approximately HK$976.1 million as of December 31, 2021, down from approximately HK$1,107.4 million as of December 31, 2020[102] - The net gearing ratio improved to 28.9% as of December 31, 2021, from 36.7% as of December 31, 2020[102] Dividends and Shareholder Returns - The Board intends to maintain a long-term dividend payout ratio of not less than 20% of the Group's distributable profit for the year[123] - A final dividend of HK11.8 cents per ordinary share was declared for the year ended December 31, 2021, compared to HK7.4 cents for the previous year[123] - An interim dividend of HK7.5 cents per share was paid on November 30, 2021[123] - As of December 31, 2021, the company's distributable reserves amounted to approximately HK$713.7 million, with a proposed final dividend of approximately HK$122.7 million for the year[156] Operational Efficiency - The manufacturing site in Vietnam achieved a year-on-year revenue growth of approximately 26.9% in 2021 despite the Pandemic[32] - Operations in Sri Lanka observed a year-on-year revenue growth of approximately 98.5% in 2021, reflecting improved efficiencies and economies of scale[33] - Selling and distribution expenses represented approximately 4.2% of total revenue for the year ended 31 December 2021, down from 4.5% in 2020, reflecting economies of scale[79] - Administrative expenses accounted for approximately 7.0% of total revenue in 2021, a decrease from 7.3% in 2020, also due to economies of scale[80] - Research and development costs were approximately 2.1% of total revenue for the year ended 31 December 2021, down from 2.3% in 2020[81] Employee and Management - The Group employed a total of 8,957 full-time employees as of December 31, 2021, an increase from 7,825 in the previous year due to overseas expansion[117] - The Group has implemented a competitive remuneration package and performance appraisal system to reward and recognize employees[151] - The Company has implemented an additional performance incentive plan, allowing for monthly bonuses of up to 10% of basic salary for employees meeting key performance indicators[174] Environmental and Social Responsibility - The Group's environmental policies include compliance with applicable laws and regulations, and it has taken steps to minimize adverse environmental effects[143] - The Group's sewage treatment plants ensure that processed sewage meets chemical standards before discharge[143] - The Group's operating scale has expanded, leading to proportional increases in resource use, gas emissions, and waste disposal, all of which were under control during the review year[146] - The group made charitable and other donations amounting to approximately HK$2,762,000 during the year ended December 31, 2021[160] Risk Management and Future Outlook - The Group emphasizes the importance of risk management to navigate the changing market landscape due to geopolitical tensions and COVID-19[129] - The overall economic outlook remains positive despite challenges, with the Group confident in maintaining its leading position in the lingerie material market[129] - The Group plans to explore capacity expansion both domestically and overseas to meet growing customer demands[130] - The Group will implement relevant measures to address factors affecting profitability as it expands its operations[130]

Financial Performance - Sales revenue increased to approximately HK$2,076.3 million for the six months ended June 30, 2021, representing an increase of approximately 47.6% compared to the corresponding period last year[24]. - The Group's gross profit for the Reporting Period amounted to approximately HK$507.0 million, representing an increase of approximately 48.4%[42]. - Profit attributable to owners of the Company was approximately HK$175.2 million, representing an increase of approximately 105.2%[43]. - Basic earnings per share increased to approximately HK16.85 cents, up approximately 105.2% from the previous period[46]. - Net profit for the six months ended June 30, 2021, amounted to approximately HK$168.7 million, representing an increase of approximately 118.6% compared to approximately HK$77.2 million for the same period in 2020[70]. - Total comprehensive income for the period reached HK$211,817,000, compared to HK$17,818,000 in the previous year, marking a significant increase[189]. - Profit before taxation increased to HK$195,212,000, up from HK$87,025,000 in the previous year, marking a significant increase of approximately 124.8%[187]. Revenue Breakdown - Revenue from sales of elastic fabric increased by approximately 45.1% to approximately HK$1,544.2 million[41]. - Revenue from sales of elastic webbing increased by approximately 63.1% to approximately HK$488.4 million[41]. - Revenue from the sportswear and apparel fabric segment reached approximately HK$983.4 million, representing an increase of approximately 54.0%[41]. - The increase in overall revenue was mainly due to the rebound in sales orders from lingerie customers and continued growth in sportswear and apparel sales orders[49]. - The main contributors to the revenue increase were the elastic fabric and elastic webbing business segments[54]. Cost and Expenses - The Group's total cost of sales for the six months ended June 30, 2021, was approximately HK$1,569.2 million, an increase of approximately HK$504.2 million or 47.3% compared to the same period in 2020[61]. - Selling and distribution expenses represented approximately 4.9% of total revenue for the six months ended June 30, 2020, and approximately 4.7% for the six months ended June 30, 2021, indicating a decrease in the ratio due to economies of scale[78]. - Administrative expenses accounted for approximately 7.7% of total revenue for the six months ended June 30, 2020, and approximately 7.4% for the six months ended June 30, 2021, reflecting a reduction in the ratio due to economies of scale[79]. - Research and development costs represented approximately 2.5% of revenue for the six months ended June 30, 2020, and approximately 2.4% for the six months ended June 30, 2021, highlighting the company's commitment to innovation[83]. - Finance costs decreased by approximately 33.9% from HK$41.6 million for the six months ended June 30, 2020, to HK$27.5 million for the six months ended June 30, 2021, primarily due to lower average borrowings and decreased market interest rates[88]. Market and Economic Conditions - The global GDP was forecasted to be around US$142 trillion, which increased by US$10.3 trillion compared to 2020[23]. - The supportive fiscal and monetary policies from governments contributed to the market recovery observed in the first half of 2021[23]. - The U.S. real GDP recorded growth rates of 4.3%, 6.3%, and 6.5% in the fourth quarter of 2020, first quarter, and second quarter of 2021, indicating a recovery in the global economy[115]. - The GDP of the PRC increased by 12.7% in the first six months of 2021 compared to the same period in 2020, indicating a strong economic recovery[119]. - The overall economic recovery is influenced by geopolitical tensions, pandemic developments, and the ability to control the spread of new variants like Delta[117]. Strategic Initiatives - Strategic investments in international operations allowed the company to respond effectively to market upturns during the first half of 2021[32]. - The company has been a pioneer in making substantial investments in its internationalization plan[31]. - The Group aims to further penetrate the sportswear and apparel business segment by leveraging its innovation and research capabilities[116]. - Continuous strategic investments in personnel and capacity expansion are believed to underpin the Group's long-term sustainability and maximize shareholder value[121]. - The Group plans to adopt a more proactive approach to explore further capacity expansion in both the PRC and overseas, moving away from the conservative investment strategy of the previous year[120]. Shareholder Information - Grandview Capital Investment Limited holds 637,500,000 ordinary shares, representing approximately 61.30% of the total shareholding[144]. - FMR LLC has an interest in 91,518,800 ordinary shares, accounting for about 8.80% of the total shareholding[144]. - The total number of shares held by substantial shareholders indicates a strong ownership concentration within the company[144]. - The Company declared an interim dividend of HK$0.075 per ordinary share for the six months ended June 30, 2021[168]. - The Company has disclosed that all substantial shareholders' interests are in compliance with the Securities and Futures Ordinance[140]. Operational Metrics - As of June 30, 2021, net working capital was approximately HK$862.5 million, an increase of approximately HK$68.2 million compared to HK$794.3 million as of December 31, 2020[100]. - Bank balances and cash increased by approximately HK$179.3 million to approximately HK$1,272.2 million as of June 30, 2021, compared to December 31, 2020[100]. - Trade and bills receivables turnover days improved to approximately 67.4 days for the six months ended June 30, 2021, down from approximately 81.8 days for the year ended December 31, 2020[104]. - Inventory turnover days decreased to approximately 120.9 days for the six months ended June 30, 2021, compared to approximately 137.2 days for the year ended December 31, 2020, due to better inventory control[104]. - The Group's net gearing ratio was approximately 31.1% as of June 30, 2021, down from approximately 36.7% as of December 31, 2020[103].

Economic Impact - The global GDP in 2020 was projected to be around US$130 trillion, which was approximately US$9.6 trillion less compared to 2019[15]. - The real GDP of the U.S. decreased by around 3.5% in 2020, compared to an increase of around 2.2% in 2019, impacting global consumer markets and the Group's financial performance[22]. - Vietnam's GDP grew by around 2.9% in 2020, making it one of the few countries with positive growth during the pandemic[28]. - The textile and garment industry faced unprecedented challenges due to the COVID-19 pandemic and ongoing political and trade tensions between the PRC and the USA[13]. - The challenges faced by the industry led many affected companies to struggle for survival[13]. Company Performance - The Group achieved an encouraging growth of approximately 36.0% in sales of elastic fabric for sportswear and apparel during the year ended 31 December 2020[16]. - The Group's sales revenue for sportswear and apparel fabric materials segment increased to approximately HK$1,696.0 million for the year ended December 31, 2020, representing a year-on-year growth of approximately 36.0%[35]. - The Group recorded a year-on-year growth of approximately 36.0% in sales revenue of sportswear and apparel fabric materials despite the adverse impacts of COVID-19[52]. - For the year ended 31 December 2020, total revenue amounted to approximately HK$3,494.3 million, representing a decrease of approximately HK$143.5 million, or approximately 3.9%, from HK$3,637.8 million in 2019[47]. - Revenue from elastic fabric sales was approximately HK$2,660.9 million, an increase of approximately HK$19.9 million, or approximately 0.8%, compared to 2019[52]. Operational Adjustments - The Group successfully stabilized its production and operations despite the difficult business environment in 2020[16]. - The Group shifted production among different manufacturing plants globally during lockdowns to support customers[16]. - The textile and garment industry had to pause manufacturing and social activities at different times throughout 2020 due to the pandemic[13]. - Temporary suspensions of operations at various manufacturing sites were mandated by local authorities at different times throughout 2020[22]. - The Group's internationalization plan allowed for operational adjustments to cope with challenges from COVID-19 and U.S.-PRC trade tensions[23]. Financial Management - The Group secured a new syndication loan facility amounting to HK$1.8 billion in June 2020, contributing to financial and risk management[19]. - The Group's net profit margin improved to approximately 8.2% for the six months ended 31 December 2020, compared to 5.5% in the previous period[41]. - The Group's cost of sales for the year ended 31 December 2020 was approximately HK$2,650.9 million, a decrease of approximately HK$114.0 million, or 4.1%, compared to the previous year[62]. - The net profit for the year ended 31 December 2020 was approximately HK$249.2 million, representing a decrease of approximately 16.7% compared to HK$299.1 million in 2019[75]. - The net gearing ratio improved to 36.7% as of December 31, 2020, down from 59.1% as of December 31, 2019[107]. Cost Control Measures - The Group's proactive cost control measures included savings in human resources, sales, marketing, and administrative functions during the financial year 2020[35]. - The Group adopted various cost-saving measures in response to the COVID-19 pandemic to mitigate its adverse effects[63]. - Direct labor costs increased by approximately 10.7% for the year ended 31 December 2020, attributed to the expansion of overseas manufacturing bases in Vietnam and Sri Lanka[64]. - Selling and distribution expenses represented approximately 4.5% of total revenue in 2020, down from 4.7% in 2019[88]. - Administrative expenses increased to approximately 7.3% of total revenue in 2020 from 6.1% in 2019, primarily due to slower expansion impacted by COVID-19[89]. Future Outlook - The Group anticipates a strong sales rebound in 2021, driven by mass COVID-19 vaccination and improving market sentiment, particularly in the PRC retail market[130]. - The Group plans to continue capacity expansion both domestically and overseas to meet growing market demands[136]. - The company anticipates that sales revenue from the sportswear and fabric materials segment will continue to be a key growth driver in the near future due to the rising health consciousness and demand for innovative apparel products[137]. - The Group aims to differentiate itself by focusing on innovation and technology to cater to the rising demand for innovative apparel products, especially in the athleisure segment[135]. - The Group plans to explore further capacity expansion in Vietnam to meet the anticipated increase in market demand for innovative textile products[29]. Environmental and Social Responsibility - The Group's environmental policies include on-site sewage treatment plants that treat wastewater from production processes, ensuring compliance with chemical standards before discharge[158]. - The Group has ISO certification for its main manufacturing sites, indicating effective environmental and energy management throughout the manufacturing process[158]. - Charitable and other donations made by the Group during the year ended December 31, 2020 totaled approximately HK$2,468,000[174]. - Further details on the Group's environmental performance and key performance indicators will be disclosed in the upcoming Environmental, Social and Governance Report 2020[156]. - The Group has complied in material respects with relevant laws and regulations in the Cayman Islands, PRC, Hong Kong, Vietnam, Sri Lanka, and the U.S. for the year ended 31 December 2020[161].

COVID-19 Impact - The first half of 2020 was extremely challenging due to the COVID-19 pandemic, which negatively impacted global consumer markets and financial performance[21]. - The Group's production was disrupted at various times during the first half of 2020 due to emergency public health measures adopted by countries including the PRC, Vietnam, and Sri Lanka[21]. - Retail, trade, and tourism sectors were hard hit by COVID-19, leading to rising unemployment globally and negatively affecting overall sales[21]. - The decrease in orders received from customers impacted overall production capacity utilization and economies of scale, but the Group took proactive cost control measures[30]. - The Group successfully secured a new syndicated loan amounting to HK$1.8 billion in June 2020, contributing to financial and risk management[26]. - Recent statistics indicate signs of economic recovery in the PRC, contributing to a rebound in sales orders since the end of the second quarter of 2020[26]. - The Group adopted various cost-saving measures in response to the pandemic, although manufacturing costs increased due to recent expansions[43]. - The company reported a significant impact on financial performance due to COVID-19, resulting in reduced revenue and net profit, alongside increased expected credit losses on trade receivables[165][170]. - The company faced temporary disruptions in production due to COVID-19, affecting operations at various production bases during the reporting period[165]. Financial Performance - The Group's overall revenue decreased by approximately 12.2% to approximately HK$1,406.6 million for the six months ended June 30, 2020, compared to approximately HK$1,602.8 million in the corresponding period of 2019[27]. - The Group's gross profit for the Reporting Period amounted to approximately HK$341.6 million, representing a decrease of approximately 12.9% compared to the six months ended June 30, 2019[30]. - Profit attributable to owners of the Company was approximately HK$85.4 million, representing a decrease of approximately 29.4% compared to the six months ended June 30, 2019[30]. - Basic earnings per share was approximately HK8.21 cents, a decrease of approximately 29.4% from approximately HK11.63 cents for the six months ended June 30, 2019[30]. - Net profit for the six months ended June 30, 2020, was approximately HK$77.2 million, a decrease of approximately 36.3% compared to approximately HK$121.2 million for the same period in 2019[52]. - The overall net profit margin decreased to approximately 5.5% for the six months ended June 30, 2020, down from approximately 7.6% for the same period in 2019[52]. - Total comprehensive income for the period was HK$17,818, significantly lower than HK$98,974 in the previous year[148]. - The profit for the period was HK$85,406,000, compared to a profit of HK$120,924,000 for the same period in the previous year, reflecting a decline of approximately 29.3%[154]. - The total comprehensive income for the period reflects a significant decrease compared to the previous year, indicating potential challenges in market conditions[154]. Revenue Breakdown - Revenue from sales of elastic fabric decreased by approximately 6.9% to approximately HK$1,064.5 million, while revenue from sales of elastic webbing and lace decreased by approximately 28.1% and 1.6%, to approximately HK$299.5 million and HK$42.6 million, respectively[30]. - Sales revenue of sportswear and apparel fabric materials grew approximately 13.6% year-on-year, while lingerie fabric materials saw a decline of approximately 26.7% due to COVID-19 impacts[8]. - Revenue from the sales of elastic webbing decreased by approximately HK$117.2 million or 28.1% compared to the same period in 2019, attributed to weak market conditions[8]. - Revenue from elastic fabric sales amounted to HK$1,064,511,000, with HK$425,834,000 from lingerie and HK$638,677,000 from sportswear and apparel[183]. - Total segment revenue for the six months ended June 30, 2020, was HK$1,406,651, down from HK$1,602,849 in the previous year, representing a decrease of about 12%[199]. Cost Management - The Group implemented various cost-saving measures across functions such as human resources, administration, and production efficiencies during this difficult period[24]. - The cost of raw materials decreased by approximately 17.7% due to a drop in crude oil prices during the reporting period[42]. - Administrative expenses increased to approximately 7.7% of total revenue for the six months ended June 30, 2020, compared to 6.4% for the same period in 2019, primarily due to diseconomies of scale[63]. - Research and development costs decreased to approximately 2.5% of revenue for the six months ended June 30, 2020, down from 3.1% in the same period of 2019, attributed to the integration of projects and cost-saving measures[64]. Cash Flow and Liquidity - Net cash generated from operating activities for the six months ended June 30, 2020 was approximately HK$287.4 million, compared to HK$177.9 million for the same period in 2019[81]. - Net cash used in investing activities was approximately HK$13.5 million for the six months ended June 30, 2020, a decrease from approximately HK$199.7 million for the same period in 2019[84]. - The net increase in cash and cash equivalents was HK$244,659,000, compared to HK$96,778,000 in the same period last year, reflecting a strong liquidity position[161]. - The cash and cash equivalents at the end of the period amounted to HK$783,171,000, up from HK$539,494,000 at the end of June 2019[161]. Shareholding and Corporate Governance - Mr. Lu Yuguang holds a long position of 3,000,000 shares, representing approximately 0.29% of the total shareholding[110]. - The company continues to comply with the disclosure requirements set forth by the Securities and Futures Ordinance (SFO)[114]. - The Board believes the company has complied with the Corporate Governance Code throughout the six months ended June 30, 2020[123]. - The company has not granted any share options under the Share Option Scheme since its adoption on May 8, 2014[122]. Economic Environment - In Q2 2020, the U.S. GDP decreased at an annual rate of approximately 32.9%, following a 5.0% decline in Q1 2020[97]. - The Euro area recorded GDP declines of approximately 3.1% in Q1 2020 and 15.0% in Q2 2020, reflecting the economic damage from COVID-19 containment measures[97]. - China's GDP decreased by approximately 6.8% in Q1 2020 but rebounded by approximately 3.2% in Q2 2020, indicating a recovery in industrial activities[101]. - The China Manufacturing Purchasing Managers Index rose to 51.1 in July 2020, marking the fifth consecutive month above 50.0, suggesting improvement in the manufacturing sector[101]. Future Outlook - Best Pacific plans to focus on the sportswear and apparel segment in the PRC market, capitalizing on increased health awareness among the public[101]. - The company aims to manage operating costs and credit risks amid challenges posed by a weakened U.S. dollar and weak market sentiment in the textile and apparel sectors[102]. - Best Pacific is confident in its customer-centric strategy and anticipates gaining market share from competitors that may exit the market due to ongoing challenges[103]. - The company believes it will not only overcome short-term difficulties from COVID-19 but also continue to grow its market share sustainably and deliver satisfactory returns to investors in the long run[103].

Financial Performance - For the year ended December 31, 2019, the Group achieved an overall sales growth of approximately 22.9% in elastic fabric compared to the previous year[18]. - Total revenue for the year ended December 31, 2019, amounted to approximately HK$3,637.8 million, representing a growth of approximately 13.2% compared to the previous year[27]. - Sales revenue of sportswear and apparel fabric materials registered a year-on-year growth of approximately 32.7%, increasing from approximately HK$939.9 million in 2018 to approximately HK$1,247.1 million in 2019[27]. - The overall net profit position was achieved by Trischel Fabric (Private) Limited during the year under review, while Best Pacific Textiles Lanka (Pvt) Ltd incurred a loss of approximately HK$33.9 million[42]. - Net profit for the year ended December 31, 2019, amounted to approximately HK$299.1 million, representing an increase of approximately 6.7% compared to approximately HK$280.2 million for the year ended December 31, 2018[73][74]. - The Group recorded a lower net profit margin of approximately 8.2% for the year ended December 31, 2019, a decline of approximately 0.5 percentage points from the previous year[73][74]. - The Group's gross profit increased to approximately HK$872.8 million, up from approximately HK$792.0 million for the year ended December 31, 2018, reflecting a stable profitability[72][74]. Market Conditions - The GDP in the People's Republic of China expanded by 6.1% in 2019, down from 6.7% in 2018, marking the slowest growth rate since 1990[11]. - The U.S. GDP growth rate was 2.1% in the fourth quarter of 2019, a decrease from 2.9% in 2018, reflecting reduced consumer spending and business activities[12]. - The unemployment rate in Europe stood at 7.4% in December 2019, with GDP growth in the region at approximately 1.0% year-on-year in the fourth quarter, the weakest since 2013[12]. - The trade conflicts between the U.S. and China have negatively impacted trade activities and export demands, contributing to the slowdown in GDP growth[11]. Production and Capacity Expansion - The Group successfully completed Phase II of its production site in Vietnam and Phase I of its joint venture in Sri Lanka in the second half of 2019, enhancing production capacity[17]. - The establishment of the second production base in Vietnam and the joint venture with Brandix Lanka Limited in Sri Lanka were successfully completed in the second half of 2019[19]. - The internationalization plan initiated in 2017 has led to successful overseas expansions in Vietnam and Sri Lanka, although associated costs may negatively impact profitability in the short run[36]. - The Group's overall designed production capacities for elastic fabric, elastic webbing, and lace were approximately 197.7 million meters, 1,868.2 million meters, and 39.7 million meters, respectively, as of December 31, 2019[163]. - The Group expects its Vietnam facilities to contribute approximately 20% to 25% of the overall production capacities for elastic fabric and 10% to 15% for elastic webbing once fully ramped up[163]. Strategic Initiatives - The Group's internationalization blueprint has been executed smoothly, allowing it to capitalize on tariff concessions under various trade agreements[17]. - The Group's strategic initiatives have positioned it to promote high-quality products to customers benefiting from tariff concessions[17]. - The Group's strategy includes leveraging strong innovation and R&D capabilities to expand into the sportswear and apparel materials markets[49]. - The Group's partnership with leading Sri Lankan apparel manufacturers is expected to facilitate long-term growth despite initial losses from a non-wholly owned subsidiary[45]. Financial Management - The Group's cost of sales for the year ended December 31, 2019, was approximately HK$2,765.0 million, an increase of approximately HK$344.3 million or 14.2% compared to 2018, primarily due to increased sales volume[60]. - Finance costs increased by approximately 36.7% from approximately HK$66.4 million in 2018 to approximately HK$90.8 million in 2019[98]. - The effective tax rate decreased to approximately 11.2% for the year ended 31 December 2019, down from 15.3% in 2018[115]. - The Group's net gearing ratio increased to 59.1% as of December 31, 2019, compared to 51.0% in 2018, with net debt rising to approximately HK$1,546.7 million from HK$1,252.2 million[125]. Environmental and Compliance - The Group has achieved ISO14001:2004 certification, indicating effective environmental and energy management throughout the manufacturing process[191]. - The Group has onsite sewage treatment plants that treat wastewater from production processes, particularly dyeing and printing, ensuring compliance with environmental standards[191]. - The environmental protection department has set up monitoring equipment at the Group's sewage treatment plants to ensure compliance with discharge standards[191]. - The Group is committed to minimizing the environmental impact of its operations through continuous monitoring and appropriate measures[191]. - The Group's operations are compliant with relevant laws and regulations in the Cayman Islands, PRC, Hong Kong, Sri Lanka, and Vietnam for the year ended December 31, 2019[196]. Employee and Remuneration - As of December 31, 2019, the Group employed a total of 7,437 full-time employees, an increase from 6,967 employees as of December 31, 2018, primarily due to overseas expansion[149]. - The Group's remuneration packages include salary, bonuses, allowances, and retirement benefits based on employee performance, skills, and knowledge[152]. - The Group's remuneration policy did not change significantly during the year, and it will continue to provide regular training and competitive remuneration packages[152].

Economic Overview - The average GDP growth in the PRC for the first half of 2019 was approximately 6.3%, down from 6.8% in the same period of 2018[14]. - The International Monetary Fund revised the full year emerging market economic growth in 2019 to approximately 4.1%, marking a decade low[11]. - The global economic growth is expected to slow down to approximately 3.2% in 2019, the weakest pace of expansion for a decade according to the IMF[15]. - The current economic environment in the PRC is under pressure, with signs of a global economic slowdown affecting investment growth[11]. - The annual GDP growth rate in the U.S. dropped to approximately 2.3% in Q2 2019, compared to 3.2% and 2.5% in Q4 2018[101]. - The consumer price index (CPI) in the U.S. decreased to approximately 1.6% for the twelve months ended June 30, 2019, lower than the Federal Reserve's inflation target of 2%[115]. Trade and Export Performance - Exports from the PRC to the U.S. decreased by approximately 8.1% in the first six months of 2019 compared to the same period in 2018, reflecting the impact of the ongoing trade war[14]. - The company reported that the manufacturing and export companies in the PRC faced the weakest operating conditions in three years due to the trade war[9]. - The Group's internationalization plan, initiated in 2017, involved diversifying production bases into Vietnam and Sri Lanka, which is expected to enhance market share in the global apparel market[24][26]. Financial Performance - The Group achieved a record high revenue of approximately HK$1,602.8 million for the six months ended June 30, 2019, representing an increase of approximately 18.6% compared to HK$1,351.3 million for the same period in 2018[20][22][32]. - Revenue from sales of elastic fabric increased by approximately 34.2% to approximately HK$1,142.8 million during the Reporting Period, driven by expansion into lingerie, sportswear, and apparel fabric segments[22][27][32]. - The Group's gross profit for the Reporting Period amounted to approximately HK$392.0 million, representing an increase of approximately 21.4% compared to the same period in 2018[29]. - The profit attributable to owners of the Company was approximately HK$120.9 million, representing an increase of approximately 16.2% compared to the same period in 2018[29]. - Basic earnings per share increased by approximately 15.8% to approximately HK11.63 cents for the Reporting Period[29]. - Net profit for the six months ended June 30, 2019, amounted to approximately HK$121.2 million, representing an increase of approximately 17.9% compared to approximately HK$102.8 million for the same period in 2018[53]. Cost and Profitability - The gross profit margin increased by approximately 0.6 percentage points to approximately 24.5% for the Reporting Period[29]. - Overall operational costs continued to rise in both the PRC and Vietnam, but the depreciation of the Renminbi against the Hong Kong dollar eased some inflationary pressures[29]. - The increase in gross profit margin was attributed to economies of scale, RMB depreciation against HK$, and a decrease in unit prices of main raw materials[52]. - The Group recorded a stable net profit margin of approximately 7.6% for both the six months ended June 30, 2018, and 2019[53]. Investment and Expansion - Best Pacific will continue to invest in product innovation, people, and manufacturing infrastructure to leverage its competitive strengths[16]. - The company aims to take advantage of tariff concessions in Vietnam and Sri Lanka as part of its strategy for sustainable growth[16]. - The Group is committed to ramping up production facilities in Sri Lanka, which are expected to contribute approximately 20% to 25% and 10% to 15% of the Group's overall production capacities for elastic fabric and elastic webbing, respectively[109]. - The second phase of the Vietnam production site is expected to roll out in the second half of 2019, with anticipated rising contributions to the Group[108]. Shareholding and Corporate Governance - As of June 30, 2019, Mr. Lu Yuguang holds a long position of 640,500,000 shares, representing approximately 61.59% of the company's shareholding[128]. - Mr. Zhang Haitao has a long position of 77,794,000 shares, which accounts for approximately 7.48% of the company's shareholding[142]. - The Company has adopted two share option schemes, including the Pre-IPO Share Option Scheme[177]. - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2019, consistent with the previous year where no interim dividend was declared[191][194]. - The unaudited condensed consolidated results for the six months ended 30 June 2019 have been reviewed by Deloitte Touche Tohmatsu, with no disagreements from the Audit Committee[192][196]. Challenges and Future Outlook - The group anticipates a complicated and challenging business environment in the future due to international trade conflicts and unfavorable manufacturing conditions in the PRC[100]. - The management believes that continuous investment in overseas operations will enhance the Group's competitiveness despite short-term pressure on operating margins[113]. - The company is focused on maintaining strong business momentum despite the challenging operating environment[121].

Economic Environment - The Group experienced a decline in profitability due to increased operating costs and stringent environmental regulations in the PRC[14]. - The trade tensions initiated by the U.S. imposing tariffs have escalated, posing systemic risks to the global economy[15]. - The overall economic growth in 2018 was less synchronized compared to 2017, with robust growth in the U.S. and emerging Asia, while the UK and euro area faced disappointing growth[8]. - The economic environment in 2018 was characterized by relaxed monetary policies globally, yet with diverging growth patterns across different regions[8]. - The Group anticipates continued challenges in maintaining corporate margins due to external economic pressures[14]. Manufacturing Challenges - The manufacturing industry in the PRC is facing challenges such as an aging population and high wages, which have pressured corporate earnings[14]. - The RMB appreciated against the U.S. dollar for most of the first half of 2018, further increasing operating costs for companies[14]. - Business activities in the PRC moderated in Q2 2018 due to regulatory tightening in the real estate sector[9]. - The Group's primary production base is located in the PRC, which has been affected by rising manufacturing costs and exchange rate volatilities[14]. - The Group's performance was impacted by various market factors, including increased manufacturing costs and political events[9]. Financial Performance - Best Pacific achieved a record revenue of approximately HK$3,212.6 million for the year ended 31 December 2018, representing a year-on-year growth of approximately 14.9%[18]. - Gross profit margin declined to approximately 24.7% and net profit margin to approximately 8.7% for the year ended 31 December 2018, down from 27.6% and 10.9% in 2017[34]. - Net profit for the year ended 31 December 2018 amounted to approximately HK$280.2 million, representing a decrease of approximately 7.7% compared to approximately HK$303.6 million for the year ended 31 December 2017, with a net profit margin decline of approximately 2.2 percentage points to approximately 8.7%[78]. - Other income decreased by approximately 19.4%, from approximately HK$50.7 million for the year ended 31 December 2017 to approximately HK$40.8 million for the year ended 31 December 2018, primarily due to decreases in government grants and net proceeds from sales of scrap materials[82]. - The Group's total revenue for the year ended 31 December 2018 was approximately HK$3.21 billion, an increase of approximately HK$417.8 million, or approximately 14.9%, compared to the previous year[57]. Growth and Expansion - The company experienced significant growth in its elastic fabric and lace businesses, with year-on-year increases of approximately 21.6% and 36.6%, respectively[33]. - The company plans to leverage its strong research and development capabilities to produce quality products and capture opportunities in the sportswear and apparel markets[24]. - Best Pacific completed the acquisition of 51% shareholding in Trischel Fabric (Private) Limited on 1 August 2018, enhancing its global footprint[20]. - The company has initiated an internationalization plan since 2016, establishing manufacturing sites in Vietnam and Sri Lanka to capitalize on lower manufacturing costs and market opportunities[45][47]. - The Group's expansion plans are aimed at reinforcing its position as a leading textile player despite uncertainties in the global economy[155][157]. Operational Efficiency - The company is focusing on automation in manufacturing processes to tackle rising human resource costs and improve overall production efficiency[43][44]. - The increase in orders has improved the utilization of production facilities, leading to enhanced profitability[43][44]. - The Group has streamlined internal workflows and introduced automation in manufacturing to manage challenges from currency fluctuations and rising operating costs[169]. Cash Flow and Capital Management - Net cash generated from operating activities increased from approximately HK$234.8 million for the year ended 31 December 2017 to approximately HK$563.0 million for the year ended 31 December 2018[116]. - Net cash used in investing activities decreased to approximately HK$654.9 million for the year ended 31 December 2018, down from approximately HK$1,009.9 million for the year ended 31 December 2017[117]. - The Group's gearing ratio was 73.5% as of 31 December 2018, an increase from 53.9% as of 31 December 2017[119]. - The Group was in a net debt position of approximately HK$1,252.2 million as of 31 December 2018, compared to approximately HK$997.2 million as of 31 December 2017[119]. - The net cash generated from financing activities decreased from approximately HK$516.0 million in 2017 to approximately HK$372.6 million in 2018, primarily due to a reduction in bank borrowings[120]. Taxation and Compliance - The two-tiered profits tax rates regime was introduced in Hong Kong, with the first HK$2 million of profits taxed at 8.25% and profits above that taxed at 16.5%[98]. - The effective tax rate for the year ended 31 December 2018 was approximately 15.3%, a slight decrease from 15.6% for the year ended 31 December 2017[111]. - The Group has complied in material respects with relevant laws and regulations in the Cayman Islands, PRC, Hong Kong, Sri Lanka, and Vietnam for the year ended 31 December 2018[188]. - The Group's environmental management is certified under ISO14001:2004, ensuring compliance with environmental laws and regulations[182]. Employee and Operational Metrics - As of 31 December 2018, the Group employed a total of 6,967 full-time employees, an increase from 6,409 employees as of 31 December 2017, primarily due to the acquisition of Trischel in Sri Lanka[145][148]. - The Group's annual designed production capacities as of December 31, 2018, were approximately 167.4 million meters for elastic fabric, 1,785.2 million meters for elastic webbing, and 29.8 million meters for lace[159][161]. - Inventory turnover days increased from 108.2 days in 2017 to 117.6 days in 2018, attributed to higher raw material purchases and shorter production lead times[127]. Dividends and Shareholder Returns - The Board declared a final dividend of HK6.7 cents per ordinary share for the year ended December 31, 2018, up from HK5.9 cents for the previous year, with payment expected around June 12, 2019[152][156]. - The Group intends to maintain a long-term, stable dividend payout ratio of not less than 20% of the Group's distributable profit for the year[149][150].