Annual Report 年報 2021 Annual Report 2021 年報 CONTENTS 目錄 160 Financial Summary 財務概要 合豐集團控股有限公司 • 二零二一年年報 01 CHAIRMAN'S STATEMENT 主席報告 2 Corporate Information 公司資料 4 Chairman's Statement 主席報告 6 Management Discussion and Analysis 管理層討論及分析 11 Management Profile 管理層履歷 14 Corporate Governance Report 企業管治報告 32 Environmental, Social and Governance Report 環境、社會及管治報告 54 Directors' Report 董事會報告 67 Independent Auditor's Report 獨立核數師報告 73 Consolidated Statement of Profit or Loss and Other Comprehensive Income 綜合損益及其他全面收 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不對因本公佈全部或任何 部分內容而產生或因依賴該等內容而引致之任何損失承擔任何責任。 （於開曼群島註冊成立的有限公司） 股份代號：2320 截至二零二一年十二月三十一日止年度 現金淨額（銀行結餘及現金減銀行借貸總額）為19,800,000港元，而二零二零年 則為8,900,000港元。 1 合豐集團控股有限公司（「本公司」）董事會（「董事會」或「董事」）欣然宣佈本公司 及其附屬公司（統稱「本集團」╱「集團」）截至二零二一年十二月三十一日止年度 之未經審核綜合業績，連同截至二零二零年十二月三十一日止年度之比較數字如下： 未經審核全年業績公佈 財務摘要 收益減少至約755,600,000港元，較二零二零年下跌約27.4%。 本公司擁有人應佔虧損約為172,400,000港元，而二零二零年之本公司擁有人應 佔利潤約為1,400,000港元。轉盈為虧主要由於(i)上游生產線暫時停產，加上損 失第四季度旺季銷售，導致收益減少；(ii) 原材料成本增加超過平均售價增加， 無法合理轉嫁予客戶；及(iii ...

Financial Performance - Revenue for the six months ended June 30, 2021, was HK$410,020,000, representing a 26.4% increase from HK$324,394,000 in the same period of 2020[12] - Gross profit for the same period was HK$59,129,000, compared to HK$26,934,000 in 2020, indicating a significant improvement in profitability[12] - Profit attributable to owners of the Company for the period was HK$1,083,000, a recovery from a loss of HK$27,852,000 in the previous year[12] - Total comprehensive income attributable to owners of the Company for the period was HK$36,661,000, recovering from a loss of HK$58,357,000 in the same period last year[14] - Basic and diluted earnings per share for the period were HK$0.13, a significant improvement from a loss of HK$3.41 per share in 2020[14] - The Group's profit before taxation was HK$2,941,000, a turnaround from a loss of HK$27,670,000 in the previous year[12] - Segment profit for the same period was HK$18,849,000, compared to a segment loss of HK$11,573,000 in the prior year, indicating a significant turnaround[58] - EBITDA increased from HK$21.7 million to HK$55.0 million, with a profit of HK$1.1 million recorded in the first half of 2021 compared to a loss of HK$27.9 million in the same period of 2020[134] Comprehensive Income and Expenses - Other comprehensive income included an exchange difference of HK$35,578,000 arising from the translation of foreign operations, compared to a loss of HK$30,505,000 in 2020[14] - The company incurred finance costs of HK$4,442,000 for the six months ended June 30, 2021, up from HK$3,734,000 in the previous year[67] - Other expenses totaled HK$10,753,000, an increase from HK$8,286,000 in the prior year, primarily due to higher depreciation and other costs[65] - Total depreciation for the period was HK$47,592,000, slightly higher than HK$45,635,000 in the same period of 2020[76] - Selling and distribution costs increased by 16.2% to HK$15.8 million, primarily due to rising transportation costs[130] Assets and Liabilities - As of June 30, 2021, total assets less current liabilities amounted to HK$1,851,164,000, an increase from HK$1,829,208,000 as of December 31, 2020, reflecting a growth of approximately 1.2%[19] - Current assets decreased slightly to HK$626,261,000 from HK$639,558,000, representing a decline of about 2.1%[19] - The company's net assets reached HK$1,658,009,000 as of June 30, 2021, compared to HK$1,621,056,000 at the end of 2020, marking an increase of approximately 2.3%[19] - Unsecured bank borrowings decreased to HK$134,913,000 from HK$138,496,000, a reduction of about 2.1%[19] - The carrying amount of bank loans repayable within one year was HK$93,802,000, compared to HK$80,718,000 at the end of 2020, indicating a 16% increase[108] Cash Flow and Investments - For the six months ended June 30, 2021, operating cash flows before movements in working capital were HK$53,513,000, compared to HK$21,791,000 for the same period in 2020, representing an increase of 145%[27] - The net cash used in operating activities was HK$62,020,000, significantly higher than HK$21,960,000 in the previous year, indicating a deterioration in cash flow from operations[27] - The net cash used in investing activities was HK$13,525,000, a significant improvement compared to HK$51,370,000 in the same period last year, indicating better capital management[29] - Cash and cash equivalents at June 30, 2021, were HK$179,731,000, down from HK$322,182,000 at the end of the previous period, reflecting a decrease of 44%[29] Inventory and Receivables - Inventories saw a significant increase, rising to HK$251,278,000 from HK$143,471,000, which is an increase of approximately 75.3%[19] - The trade and bills receivables as of June 30, 2021, were HK$170,286,000, down from HK$192,473,000 as of December 31, 2020, representing a decrease of 11.5%[94] - The total trade, bills, and other receivables decreased to HK$183,523,000 as of June 30, 2021, from HK$200,055,000 as of December 31, 2020, a decline of 8.3%[94] - The average age of trade receivables increased to 79 days as of June 30, 2021, compared to 59 days as of December 31, 2020[99] Corporate Governance and Shareholder Information - The company has met the corporate governance code provisions throughout the reporting period, with some deviations noted[192] - The company emphasizes the importance of a quality Board and effective internal controls to enhance shareholder value[192] - The total number of shares issued by the company is 261,318,081, with Ms. Jian Jian Yi directly holding 19,754,000 shares and deemed interested in 241,564,081 shares due to her relationship with a substantial shareholder[1] - Directors' interests include Mr. Hui Sum Ping holding 15.87% of the issued share capital with 129,824,681 shares[151] - The company did not declare or propose any dividends for the six months ended June 30, 2021, nor for the same period in 2020[83] Market and Operational Insights - The Group faced significant pressure in the corrugated packaging industry due to high wastepaper costs and unstable global consumer demand[119] - The Chinese government's prohibition on wastepaper imports has made it difficult for upstream manufacturers to source raw materials[119] - The Group anticipates a recovery in the Chinese economy, which is expected to boost demand for corrugated packaging[145] - The Group aims to maintain price leadership and improve production efficiency to counter rising costs[146] - The Group emphasizes environmental protection as part of its operational strategy[146]

ANNUAL REPORT 2020 年報 CONTENTS 目錄 | Corporate Information | 2 | | --- | --- | | 公司資料 | | | Chairman's Statement | 4 | | 主席報告 | | | Management Discussion and Analysis | 6 | | 管理層討論及分析 | | | Management Profile | 10 | | 管理層履歷 | | | Corporate Governance Report | 13 | | 企業管治報告 | | | Environmental, Social and Governance Report | 31 | | 環境、社會及管治報告 | | | Directors' Report | 53 | | 董事會報告 | | | Independent Auditor's Report | 66 | | 獨立核數師報告 | | | Consolidated Statement of Profit or Loss and | 72 | | Other Comprehensiv ...

CONTENTS 目錄 CORPORATE INFORMATION 2 公司資料 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS 4 AND OTHER COMPREHENSIVE INCOME 簡明綜合損益及其他全面收益表 CONDENSED CONSOLIDATED STATEMENT OF 6 FINANCIAL POSITION 簡明綜合財務狀況表 CONDENSED CONSOLIDATED STATEMENT OF 8 CHANGES IN EQUITY 簡明綜合權益變動表 CONDENSED CONSOLIDATED STATEMENT OF 10 CASH FLOWS 簡明綜合現金流量表 NOTES TO THE CONDENSED CONSOLIDATED 12 FINANCIAL STATEMENTS 簡明綜合財務報表附註 MANAGEMENT DISCUSSION AND ANALYSIS 31 管理層討論及分析 DISCLOSURE OF INTERESTS 36 權益披露 OTHER INFORMATION 46 其他資料 COR ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不 發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失 承擔任何責任。 （於開曼群島註冊成立之有限公司） 股份代號：2320 | | 二零一九年 | 二零一八年 | | --- | --- | --- | | | 千港元 | 千港元 | | 中國其他稅項 | 6,652 | 11,585 | | 折舊* | 8,936 | 6,876 | | 法律及專業費用 | 1,280 | 942 | | 其他 | 1,300 | 4,262 | | | 18,168 | 23,665 | * 不包括計入確認為開支之存貨成本之折舊 – 1 – 本公告所提供之補充資料並不影響二零一九年年報所載之其他資料，且除上文所披露者 外，二零一九年年報所載之所有其他資料均維持不變。 承董事會命 公司秘書 許婉莉 香港，二零二零年八月二十八日 截至二零一九年十二月三十一日止年度之年報 之補充公告 茲提述合豐集團控股有限公司（「本公司」，連同其附屬公司「本集團」）於二零二零年四月 二十二日刊發之截至二零 ...

Financial Performance - The Group's overall sales volume remained stable in 2019, but average selling prices declined, leading to a decrease in revenue[18]. - The Group recorded a loss for the year due to insufficient waste paper for production and less reduction in recurring expenses, despite a decline in raw material prices[18]. - The Group recorded a revenue decrease of HK$229.8 million in 2019, representing a fall of 16.1% from HK$1,423.9 million in 2018 to HK$1,194.1 million in 2019[30]. - Gross profit declined from HK$200.2 million in 2018 to HK$115.3 million in 2019, representing a 42.4% decrease, with gross profit margin falling from 14.1% to 9.7%[31]. - The Group recorded a loss of HK$7.9 million in 2019, compared to a profit of HK$30.5 million in 2018, representing a decrease of HK$38.4 million[37]. - The company recorded a loss of HK$7.9 million for the year ended December 31, 2019, a decrease of HK$38.4 million compared to a profit of HK$30.5 million in 2018, resulting in a profit margin drop from 2.1% to -0.7%[42]. Financial Position - The Group maintained a healthy financial position with total bank balances and cash exceeding total bank borrowings at the end of 2019[18]. - As of December 31, 2019, the Group's bank balances and cash were HK$292.3 million, an increase from HK$219.4 million in 2018[38]. - The Group's net cash level was HK$75.4 million, calculated as total bank balances and cash less total bank borrowings[39]. - The Group's current ratio decreased to 1.50 from 1.64 in 2018, with net current assets at HK$186.6 million[39]. - The company’s current assets net value and current ratio were HK$186.6 million and 1.50, respectively, down from HK$262.8 million and 1.64 in 2018[43]. Production and Operations - A new production site in Southeast Asia is under construction to convert waste paper into pulp, expected to start production in mid-2020, to meet Chinese government import requirements[19]. - The Group plans to improve production processes and reduce wastage to alleviate rising operating costs and provide high-quality products[21]. - The Group plans to relocate part of its production process overseas to ensure sufficient raw materials for corrugated paper production, with new facilities expected to start operations by mid-2020[23]. - The company plans to install new production facilities in Southeast Asia to convert waste paper into pulp, aiming to reduce production costs and increase sales volume[46]. - The company aims to improve production efficiency and reduce raw material wastage and energy use to offset rising costs and enhance profitability[46]. Market Conditions - The Chinese corrugated packaging industry faced a decline in production volume and sales due to a 30-40% reduction in waste paper imports in 2019[12]. - The Group anticipates that the Chinese economy will remain under pressure from the Sino-US trade war and the novel coronavirus in the first half of 2020[20]. - The Renminbi exchange rates in 2019 were significantly lower than in 2018, negatively impacting the corrugated packaging industry[14]. - Average selling prices fell, leading to a 28.7% decline in downstream revenue, while upstream revenue rose by 3.6% despite lower prices[26]. - The average price of the main raw material, waste paper, fell by approximately 20% compared to 2018 levels[27]. Corporate Governance - The Group's management is committed to maintaining high corporate governance standards to safeguard shareholder interests and enhance corporate value[84]. - The Company has adopted the principles and code provisions of the Corporate Governance Code as the basis of its corporate governance practices[85]. - The Board believes that throughout the year ended December 31, 2019, the Company has complied with all code provisions except for specific provisions A.2.1, B.1.2, and C.3.3[87]. - The Company has established a corporate governance framework and policies based on the CG Code to enhance oversight on business conduct[86]. - The Company has adopted its own code of conduct regarding Directors' dealings in the Company's securities, aligning with the Model Code for Securities Transactions[88]. Board and Management - The Company has a senior management team with extensive experience in the corrugated packaging industry, enhancing operational efficiency[78]. - The Group's executive team includes members with over 35 years of experience in the corrugated packaging industry, contributing to strategic planning and business development[65]. - The Board consists of six Directors, including three Executive Directors and three Independent Non-executive Directors[97]. - The Company has received written annual confirmation from each Independent Non-executive Director regarding their independence, in accordance with the independence guidelines[105]. - The Independent Non-executive Directors are appointed for a specific term of around two years, subject to renewal after the expiry of the current term[106]. Risk Management - The Board reviewed the effectiveness of risk management and internal control systems for the year ended December 31, 2019, and deemed them effective and adequate[181]. - The Company has established various risk management procedures and guidelines across key business processes, including project management and financial reporting[171]. - The management reported to the Audit Committee and the Board on the effectiveness of risk management and internal control systems for the year ended December 31, 2019[173]. - All divisions conduct regular internal control assessments to identify risks impacting business operations, regulatory compliance, and information security[172]. - The Company has a disclosure policy to guide Directors and management in handling confidential information and monitoring disclosures[182]. Shareholder Engagement - The Company engages with shareholders through various communication channels to safeguard their interests and rights[191]. - Shareholders have the right to propose matters for discussion at general meetings, requiring at least 10% of the paid-up capital to call for an extraordinary general meeting[195]. - The company will publish detailed procedures for shareholders to propose candidates for election as Directors on its website[198]. - Shareholders can submit written inquiries to the Board, but verbal or anonymous inquiries will not be addressed[199]. - The company has established communication channels to engage with shareholders and ensure their rights are protected[194].

Financial Performance - Revenue for the six months ended June 30, 2019, was HK$596,889,000, a decrease of 6.6% compared to HK$638,922,000 for the same period in 2018[11]. - Gross profit for the period was HK$70,278,000, down 22.3% from HK$90,532,000 in the previous year[11]. - Profit before taxation decreased significantly to HK$3,098,000, compared to HK$24,209,000 for the same period in 2018, representing a decline of 87.2%[11]. - Profit attributable to owners of the Company was HK$1,720,000, a decrease of 91.5% from HK$20,206,000 in the prior year[11]. - Total comprehensive income for the period attributable to owners was HK$1,931,000, down 96.9% from HK$61,739,000 in the same period last year[13]. - Earnings per share decreased to HK$0.21 from HK$2.54, reflecting a decline of 91.7%[13]. - EBITDA decreased by HK$20.6 million, from HK$71.0 million to HK$50.4 million, while profit for the period dropped by 91.6%, from HK$20.2 million to HK$1.7 million[122]. Assets and Liabilities - Non-current assets as of June 30, 2019, were HK$1,417,637,000, slightly up from HK$1,415,531,000 at the end of 2018[16]. - Current assets decreased to HK$587,524,000 from HK$673,846,000, a decline of 12.8%[16]. - Inventories decreased significantly to HK$138,738,000 from HK$258,661,000, a reduction of 46.3%[16]. - Bank balances and cash increased to HK$285,656,000 from HK$219,398,000, an increase of 30.1%[16]. - As of June 30, 2019, the total equity attributable to owners of the Company increased to HK$1,564,776,000, up from HK$1,550,222,000 at the end of 2018, representing a growth of approximately 0.9%[19]. - The net current assets as of June 30, 2019, were HK$254,745,000, a slight decrease from HK$262,817,000 at the end of 2018[19]. - The total assets less current liabilities as of June 30, 2019, were HK$1,672,382,000, slightly down from HK$1,678,348,000 at the end of 2018[19]. - The Company’s unsecured bank borrowings increased to HK$175,333,000 as of June 30, 2019, from HK$166,333,000 at the end of 2018, representing an increase of approximately 5.9%[19]. - Total bank borrowings decreased to HK$208.4 million as of June 30, 2019, down from HK$221.1 million at the end of 2018, with a gearing ratio falling from 14.3% to 13.3%[128]. Cash Flow - Operating cash flows before movements in working capital for the six months ended June 30, 2019, were HK$53,131,000, down from HK$62,973,000 in the same period of 2018, indicating a decline of about 15%[27]. - Cash generated from operations for the six months ended June 30, 2019, was HK$115,768,000, compared to a cash usage of HK$101,553,000 in the same period of 2018, showing a significant turnaround[27]. - The net cash used in financing activities was HK$6,441,000, compared to a net cash generated of HK$10,110,000 in the previous year[29]. - The cash and cash equivalents at June 30, 2019, were HK$285,656,000, an increase from HK$219,398,000 at January 1, 2019[29]. Operational Highlights - The Group's manufacturing operations are all located in the People's Republic of China[43]. - The Group faced challenges in the corrugated packaging business due to the trade war between China and the US, leading to a decline in demand and increased costs from overseas purchases[109]. - The fluctuation in the Renminbi exchange rate impacted the Group's cost structure, with the currency appreciating slightly in Q1 2019 but falling back in Q2[110]. - The Group's inventory levels decreased significantly due to a lack of wastepaper for production, reflecting the challenges in the supply chain[114]. - The Group plans to move some production processes overseas to address raw material shortages and intends to build new plants to convert wastepaper into pulp for delivery to China[133]. - The Group aims to implement technological improvements on production lines to produce higher value-added products and mitigate cost pressures[135]. Shareholder Information - As of June 30, 2019, Mr. Hui Sum Ping holds 124,844,681 shares, representing approximately 15.26% of the issued share capital of the company[140]. - Mr. Hui Sum Tai owns 150,556,430 shares, accounting for about 18.41% of the issued share capital[142]. - The total issued share capital of Hop Fung GM is HK$3,000,100, divided into 100 ordinary shares and 3,000,000 non-voting deferred shares[149]. - The total number of shares that may be issued upon exercise of all options under the share option scheme must not exceed 10% of the shares in issue at the time of the scheme's adoption[163]. - The number of shares that may be issued upon exercise of all outstanding options shall not exceed 30% of the issued share capital at any time[163]. - The share option scheme was approved on June 3, 2013, to incentivize selected participants for their contributions to the Group[161]. Governance and Compliance - The Company has met the corporate governance code provisions throughout the six months ended June 30, 2019, with some deviations noted[182]. - The Audit Committee has met with the Company's Auditor once during the six months ended 30th June, 2019, instead of the required twice a year[198]. - The Company did not purchase, sell, or redeem any of its listed securities during the six months ended 30th June, 2019[193]. - The Company did not recommend the payment of an interim dividend for the six months ended June 30, 2019, consistent with the previous year[180].

Financial Performance - The Group's revenue declined sharply in 2018, while the cost of sales increased simultaneously [19]. - The Group's revenue decreased by HK$99.3 million, representing a 6.5% decline from HK$1,523.2 million in 2017 to HK$1,423.9 million in 2018 [28]. - Gross profit dropped from HK$405.5 million to HK$200.2 million, a decrease of 50.6%, with gross profit margin falling from 26.6% to 14.1% [33]. - Profit for the year declined from HK$137.7 million to HK$30.5 million, representing a decrease of 77.9% [35]. - The average cost of wastepaper rose by over 30% in 2018 compared to 2017, leading to a 9.5% increase in cost of sales from HK$1,117.7 million to HK$1,223.6 million [29]. - Sales volume fell by 10% due to raw material shortages, while the average selling price increased [25]. Financial Health - The net gearing ratio remains low at 0.1%, indicating a healthy financial situation despite the challenges faced [19]. - The Group's net gearing ratio was 0.1% as of December 31, 2018, with total unsecured bank borrowings increasing from HK$155.9 million to HK$221.1 million [37]. - The Group's net current assets were HK$262.8 million, with a current ratio of 1.64 as of December 31, 2018 [42]. - The Group's net current assets were HKD 262.8 million, down from HKD 299.2 million in 2017, with a current ratio of 1.64 compared to 1.76 in 2017 [47]. Market Conditions - The Group anticipates a slowdown in global trade and the Chinese economy due to the Sino-US trade war [20]. - The corrugated packaging industry in China faced significant pressure due to increased prices of imported wastepaper and domestic supply shortages [12]. - The Group anticipates a slight decline in overall demand due to a slowdown in the global and Chinese economies [45][49]. Strategic Initiatives - The Group will focus on improving production processes and reducing wastage to combat rising operating costs [21]. - The Group aims to leverage its vertically integrated business model for sustainable long-term earnings growth [21]. - To address raw material shortages, the Group is considering overseas pulp purchases or establishing pulp production lines abroad to reduce production costs and increase sales [45][49]. - The Group aims to improve production efficiency, increase sales volume, and reduce raw material wastage and energy use to counter rising costs and enhance profitability [45][49]. - The Group's strategy includes exploring overseas locations for new facilities to secure raw material supply [14]. Corporate Governance - The company has established a corporate governance framework based on the Corporate Governance Code, ensuring compliance with all provisions except for A.2.1, B.1.2, and C.3.3 [81][87]. - The Board consists of six Directors, including three Executive Directors and three Independent Non-executive Directors, meeting the Listing Rules requirements [91][97]. - The company has a senior management team with over 23 years of experience in the corrugated packaging industry, enhancing operational oversight [72][75]. - The company has implemented strict guidelines for securities transactions by Directors and employees, ensuring compliance throughout the year [82][84]. - The company has maintained high corporate governance standards to safeguard shareholder interests and enhance corporate value [79]. Risk Management - The Board is responsible for evaluating and determining the nature and extent of risks in achieving the Company's strategic objectives [166]. - The Company has developed various risk management procedures and guidelines for key business processes [167]. - Internal control assessments are conducted regularly to identify risks impacting the Group's business [168]. - The management reports to the Audit Committee and the Board on the effectiveness of risk management and internal control systems [169]. - The Board, supported by the Audit Committee, reviewed the risk management and internal control systems for the year ended December 31, 2018, and deemed them effective and adequate [178]. Shareholder Engagement - The company engages with shareholders through various communication channels to safeguard their interests and rights [188]. - Shareholders holding at least one-tenth of the paid-up capital may requisition an extraordinary general meeting within two months of deposit [190]. - Detailed procedures for shareholders to propose a person for election as a Director are published on the company's website [196]. - Shareholders must provide their full name, contact details, and identification when submitting written requisitions or enquiries [198].