Financial Performance - In 2022, the Group recorded a loss, although it was less substantial than the previous year's loss due to significant impairment losses recognized in 2021[15]. - The Group's revenue decreased by HK$331.2 million in 2022, representing a fall of 43.8% from HK$755.6 million in 2021 to HK$424.4 million in 2022[32]. - The Group's revenue continued to decline in the second half of 2022 compared to the same period in 2021 due to low demand and sluggish consumption sentiment in Mainland China[12]. - The average selling price and sales volume decreased due to weak demand in Mainland China, leading to a revenue drop of 41.0% in the first half of 2022 compared to the same period in 2021[26]. - The Group recorded a gross profit of HK$7.4 million in 2022, a significant recovery from a gross loss of HK$371.5 million in 2021, with the gross profit margin changing from 49.2% to 1.7%[34]. - The net loss for the year was HK$192.7 million in 2022, a decrease in loss by HK$230.1 million compared to a loss of HK$422.8 million in 2021, with the net loss margin falling from 56.0% to 45.4%[40]. - The cost of sales decreased from HK$1,127.1 million in 2021 to HK$417.0 million in 2022, a decline of 41.0% after excluding a one-off impairment cost[33]. Business Environment - The business environment for the corrugated packaging industry is expected to remain challenging due to rising interest rates, geopolitical tensions, and a global economic slowdown[21]. - The Group anticipates a challenging business environment for the corrugated packaging industry due to rising interest rates, geopolitical tensions, and global economic slowdown[23]. Financial Position - The Group maintains a healthy financial position with a net cash position, where total bank balances and cash exceed total bank borrowings[15]. - The Group's bank balances and cash were HK$110.8 million as of December 31, 2022, down from HK$246.7 million at the end of 2021[41]. - Unsecured bank borrowings decreased from HK$226.9 million at December 31, 2021, to HK$98.1 million at December 31, 2022, with a net cash level of HK$12.7 million[42]. - As of December 31, 2022, the Group's net current assets were HK$85.7 million, down from HK$225.0 million in 2021, and the current ratio decreased from 1.8 to 1.7[43][46]. - The Group's total bank borrowings to equity ratio was 10.2% as of December 31, 2022, down from 18.2% in 2021, indicating improved financial leverage[46]. - The Group's net cash position was HK$12.7 million as of December 31, 2022, compared to HK$19.8 million in 2021[46]. - The Group's financial costs decreased from HK$8.4 million in 2021 to HK$6.2 million in 2022 due to lower borrowing levels[45]. Operational Developments - The Group is currently working on transitioning from coal-fuel boilers to gas-fuel boilers, with production expected to resume in the second half of 2023[14]. - A pulp production line is being installed at a leased facility in the Philippines to mitigate rising costs under a vertically integrated operating model[20]. - The Group is installing a pulp production line in the Philippines to mitigate rising cost pressures through vertical integration[23]. - The Group aims to complete the annual inspection procedures for the boilers license and resume upstream production in 2023, while continuing the installation of large-scale pulp production lines in the Philippines to mitigate rising costs[50][53]. - The Group is actively communicating with local government to expedite the annual inspection procedures for licenses related to its operations[14]. Human Resources - The Group employed approximately 360 full-time staff as of December 31, 2022, a decrease from 805 in 2021[51][54]. - As of December 31, 2022, the Group had a total of 88 female staff out of 360 employees, representing 24.4% of the workforce[193]. Corporate Governance - The company has adopted the principles and code provisions of the Corporate Governance Code as the basis of its corporate governance practices[124]. - The Board is composed of five Directors, including two Executive Directors and three Independent Non-executive Directors[133]. - The company has established a corporate governance framework and policies based on the Corporate Governance Code to enhance oversight on business conduct[125]. - Throughout the year ended December 31, 2022, the company complied with all code provisions of the Corporate Governance Code, except for provisions C.2.1, D.3.3, and E.1.2[126]. - The company has implemented a Code of Conduct for Directors' dealings in the company's securities, adhering to the Model Code for Securities Transactions[130]. - The Company has an effective mechanism to ensure independent views are available to the Board, with the Nomination Committee assessing the independence of all independent non-executive directors annually[140]. - 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[149]. - The Company organized two in-house briefings on updates on Listing Rules for all Directors during the year ended December 31, 2022[163]. - All Independent Non-executive Directors provided written annual confirmation of their independence in accordance with the guidelines set out in the Listing Rules[144]. - The Board is collectively responsible for promoting the success of the Company by directing and supervising its affairs[151]. - Directors are encouraged to participate in continuous professional development to refresh their knowledge and skills[162]. - The Company provides induction training for newly appointed Directors to ensure understanding of the business and their responsibilities[161]. Tax Matters - The Group has lodged appeals against tax decisions and plans to object to the Tax Matter Notice, with no final court decision as of the report date[61]. - The Group has not made provisions for value-added tax and other taxes, disclosing them as contingent liabilities due to ongoing appeals[62]. - The management believes it is probable that the relevant tax bureau will accept the objections, resulting in no provision for corporate income tax being made[63]. - The Audit Committee agrees with management's position that no provision should be made until a final court decision is reached[64]. - The Company expects the Audit Qualification to be removed by the end of 2023 based on the PRC legal advisor's experience[67]. - The auditor cannot confirm the removal of the Audit Qualification for the financial year ending December 31, 2023, due to lack of a concrete timeline[69]. - The Company has obtained confirmation from a principal bank to provide sufficient financial support if required to cover tax payments or penalties[70]. - Enhanced internal control measures will be implemented at both the entity and activity levels to address the tax issues[79]. - The management asserts that the irregular VAT Invoices were obtained due to inadvertence, with no intention to evade tax[78]. - The Board believes there was no fraud or dishonesty involved in the tax deductions made by the management[81]. - Green Forest Paper is required to make approximately RMB182.8 million in tax payments, including late fees, following a court ruling[89]. - The company has the right to appeal the court's decision within 15 days, and plans to do so[89]. - A principal bank has confirmed financial support for the company to ensure solvency in case of an unfavorable appeal outcome[90]. - The company filed an administrative proceeding against the tax bureau regarding a tax penalty decision, with a court hearing scheduled for April 25, 2023[91]. - Green Forest Paper applied for a tax payment guarantee on February 28, 2023, which was accepted by the tax bureau on March 23, 2023[92]. Board Diversity - The Company aims to appoint at least one female director by December 31, 2024, as part of its Board Diversity Policy[193]. - The company recognizes the importance of Board diversity as a competitive advantage and is committed to improving it[193]. - The Nomination Committee will review the board's structure and diversity annually, considering factors such as gender, age, and professional qualifications[197]. - The board diversity policy is deemed effective for the year ending December 31, 2022[196]. - The Director Nomination Policy includes criteria such as character, qualifications, and potential contributions to ensure a balanced board[200]. - The Nomination Committee will regularly assess the diversity profile of the board and progress towards diversity objectives[197]. - The company emphasizes the importance of board diversity for maintaining competitive advantage[195]. - The board is committed to improving diversity and will continue to seek opportunities to increase the proportion of female members[195].

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。 合 豐 集 團 控 股 有 限 公 司 HOP FUNG GROUP HOLDINGS LIMITED （於開曼群島註冊成立的有限公司） 股份代號：2320 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 全 年 業 績 公 告 財務摘要 收益減少至約424,400,000港元，較二零二一年下跌約43.8%。 本公司擁有人應佔虧損約為192,700,000港元，而二零二一年之本公司擁有人 應佔虧損約為422,800,000港元。有關虧損主要由於(i)上游生產線自二零二一 年第四季度起暫時停產，導致收益減少；(ii)銷售量下跌及平均銷售價格下 跌；及(iii)有關上游生產線暫時停產的固定成本，例如若干物業、廠房及設 備折舊。 剔除年內確認之減值虧損約10,500,000港元（二零二一年：418,800,000港元）之 影響，息稅折舊攤銷前盈利（未扣除財務成本、稅項、折舊及攤銷前盈利） ...

Financial Performance - Revenue for the six months ended June 30, 2022, was HK$241,864,000, a decrease of 41.0% compared to HK$410,020,000 for the same period in 2021[12] - Gross loss for the period was HK$24,079,000, compared to a gross profit of HK$59,129,000 in the previous year[12] - Loss before taxation was HK$82,353,000, a significant decline from a profit of HK$2,941,000 in the same period last year[12] - Loss attributable to owners of the Company was HK$83,149,000, compared to a profit of HK$1,083,000 in the prior year[12] - Total comprehensive loss for the period was HK$148,408,000, compared to a comprehensive income of HK$36,661,000 in the previous year[14] - The Group reported a segment loss of HK$64,370,000 for the six months ended June 30, 2022, compared to a segment profit of HK$18,849,000 for the same period in 2021, indicating a significant deterioration in performance[57] - The Group incurred a loss before taxation of HK$82,353,000 for the six months ended June 30, 2022, compared to a profit before taxation of HK$2,941,000 in the same period of 2021, indicating a substantial decline in profitability[57] - For the six months ended June 30, 2022, the company reported a loss of HK$83,149,000 compared to a profit of HK$1,083,000 for the same period in 2021, indicating a significant decline in performance[79] - EBITDA decreased by HK$96.6 million, from HK$55.0 million to HK$-41.6 million, with a loss for the period of HK$83.1 million recorded in the first half of 2022[142] Assets and Liabilities - Non-current assets decreased to HK$1,050,268,000 as of June 30, 2022, from HK$1,153,150,000 at the end of 2021[16] - Current assets decreased to HK$355,307,000 from HK$490,295,000 at the end of 2021[16] - Current liabilities decreased to HK$193,751,000 from HK$265,334,000 at the end of 2021[16] - Net current assets were HK$161,556,000, down from HK$224,961,000 at the end of 2021[16] - As of June 30, 2022, the net assets decreased to HK$1,101,167,000 from HK$1,249,575,000 as of December 31, 2021, representing a decline of approximately 11.9%[19] - The total equity attributable to owners of the Company decreased to HK$1,101,167,000, down from HK$1,249,575,000, indicating a reduction of about 11.9%[19] - The reserves decreased from HK$1,167,811,000 as of December 31, 2021, to HK$1,019,403,000, reflecting a reduction of approximately 12.7%[19] - The Group's total liabilities as of June 30, 2022, were HK$143,829,000, a decrease from HK$147,233,000 as of December 31, 2021[104] Cash Flow and Financing - The operating cash flows before movements in working capital were negative at HK$44,379,000, compared to positive cash flows of HK$53,513,000 in the same period of 2021[28] - Cash generated from operations was HK$19,312,000, a significant recovery from a cash usage of HK$60,577,000 in the previous year[28] - The Company’s cash from operating activities was HK$18,846,000, a recovery from a net cash usage of HK$62,020,000 in the prior year[28] - Net cash used in financing activities was HK$85,626,000, significantly higher than HK$32,118,000 in the previous year, indicating increased cash outflow[30] - Cash and cash equivalents decreased by HK$65,825,000, compared to a decrease of HK$107,663,000 in the same period last year[30] - Total cash and cash equivalents as of June 30, 2022, were HK$188.1 million, down from HK$246.7 million as of December 31, 2021[143] - Total bank borrowings decreased from HK$226.9 million as of December 31, 2021, to HK$145.6 million as of June 30, 2022, with a gearing ratio falling from 18.2% to 13.2%[148] Operational Highlights - The Group's operations are primarily based in the PRC, focusing on the manufacture and sale of containerboard and corrugated packaging products[51] - The Group plans to complete the annual review of its boiler license and resume production in 2023, coinciding with the installation of a new pulp production line in the Philippines[152] - The Group aims to maintain price leadership and improve production efficiency to mitigate rising costs and achieve long-term stable growth in profitability[153] - The Group emphasizes environmental protection as part of its operational strategy to contribute to society[153] Shareholder Information - Mr. Hui Sum Ping holds 130,512,681 shares, representing approximately 15.96% of the issued share capital[158] - Mr. Hui Sum Tai owns 150,556,430 shares, which is approximately 18.41% of the issued share capital[158] - 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[166] - As of June 30, 2022, Mr. Hui Sum Ping holds 258,022,081 shares and 3,984,000 options, representing approximately 32.04% of the issued share capital[175] - The company did not declare or propose any dividends for the six months ended June 30, 2022, consistent with the previous year[82] Employee and Governance - The group employed around 750 full-time staff as of June 30, 2022, a decrease from 805 staff as of December 31, 2021[199] - The company emphasizes high standards of corporate governance to enhance shareholder value and safeguard shareholder interests[200] - Share options may be granted to employees based on performance, with competitive remuneration packages offered[199]

Financial Performance - In 2021, the Group recorded a slight profit in the first half but ended the year with a loss due to market demand fluctuations and production suspensions[17]. - The Group's revenue decreased by HK$284.8 million in 2021, representing a fall of 27.4% from HK$1,040.4 million in 2020 to HK$755.6 million[31]. - The Group reported a loss of HK$422.8 million for 2021, compared to a profit of HK$1.4 million in 2020, marking a profit margin decrease from 0.1% to -56.0%[40]. - The gross profit margin dropped from 12.3% in 2020 to -49.2% in 2021, indicating a significant decline in profitability[33]. - The average selling price increased in 2021, but was still lower than the rise in raw material costs, leading to a gross loss of HK$371.5 million[33]. - The cost of sales increased from HK$912.5 million in 2020 to HK$1,127.1 million in 2021, including an impairment loss of HK$420.6 million due to temporary production suspension[32]. - The Group's upstream revenue decreased by 75.7% compared to the previous year, while downstream revenue increased by 8.4%[24]. Market Conditions - The Group's revenue from corrugated packaging business primarily relies on domestic sales in China, which saw a rebound in the first half of 2021 but declined in the second half[12]. - Looking forward to 2022, the Group anticipates continued impacts from global inflation, interest rates, and Sino-US trade relations on the Chinese economy and market demand[19]. - The fourth quarter, traditionally a peak season for the corrugated packaging business, saw a significant drop in total sales due to upstream production suspensions[13]. Cost Management - The Group faced high overall costs due to a tight supply of raw materials, particularly after the Chinese government prohibited the import of waste paper[11]. - The Group plans to improve production processes and reduce wastage to mitigate rising operating costs and enhance product quality[20]. - The Group expects to resume production by switching to gas boilers and aims to complete the installation of large-scale pulp production lines in the Philippines to reduce costs and increase sales volume[48]. - The installation of a large-scale pulp production line in the Philippines is expected to be completed in 2023, which should significantly reduce raw material costs[28]. Financial Position - The Group maintains a net cash position, with total bank balances and cash exceeding total bank borrowings, ensuring a robust financial position[17]. - As of December 31, 2021, the Group's bank balances and cash were HK$246.7 million, down from HK$291.5 million in 2020[41]. - Total bank borrowings decreased from HK$282.6 million at the end of 2020 to HK$226.9 million at the end of 2021, with a net cash level of HK$19.8 million[42]. - The Group's net current assets were HK$225.0 million with a current ratio of 1.8 as of December 31, 2021, compared to HK$265.8 million and a current ratio of 1.7 in 2020[43]. Corporate Governance - The company has adopted the Corporate Governance Code as the basis for its governance practices, ensuring transparency and accountability[76]. - The company complied with most code provisions of the Corporate Governance Code for the year ended December 31, 2021, with exceptions noted[79][82]. - The board includes independent non-executive directors with extensive experience in accounting and enterprise management, enhancing corporate governance[60][62][64]. - The company has established a corporate governance framework to enhance oversight on business conduct and affairs[78]. - The Board is responsible for leadership, strategic decisions, and overseeing the Group's performance[104]. Risk Management - The Audit Committee assists the Board in overseeing the design, implementation, and monitoring of risk management and internal control systems[161]. - The Company has developed various risk management procedures and guidelines for key business processes, including project management and financial reporting[162]. - The management reported to the Audit Committee and the Board on the effectiveness of the risk management and internal control systems for the year ended December 31, 2021[164]. - The Internal Audit Department independently reviews the adequacy and effectiveness of the risk management and internal control systems[165]. - The Board reviewed the risk management and internal control systems for the year ended December 31, 2021, and deemed them effective and adequate[166]. Shareholder Engagement - The Company engages with shareholders through various communication channels to safeguard their interests and rights[176]. - The Company emphasizes effective communication with shareholders to enhance investor relations and understanding of business performance[192]. - The Chairman and Independent Non-executive Directors are available at annual general meetings to address shareholder inquiries[193]. - The Company encourages ongoing dialogue with shareholders through annual and other general meetings[192]. - Shareholders must submit written inquiries with identification to the Company for effective communication[191].

Financial Performance - Revenue decreased to approximately HKD 755.6 million, down about 27.4% compared to 2020[3] - The company reported a loss attributable to owners of approximately HKD 172.4 million, compared to a profit of HKD 1.4 million in 2020[3] - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was HKD 45.2 million, down from HKD 107.1 million in 2020[3] - For the year ended December 31, 2021, total revenue was HKD 755,603,000, a decrease from HKD 1,040,369,000 in 2020, representing a decline of approximately 27.5%[20] - The group reported a loss before tax of HKD 168,418,000 for 2021, compared to a profit before tax of HKD 6,503,000 in 2020[20][25] - The group incurred a loss of HKD 137,150,000 in the manufacturing segment for 2021, compared to a profit of HKD 43,621,000 in 2020[20][22] - The gross profit dropped by 61.6% from HKD 127.9 million in 2020 to HKD 49.1 million in 2021, with the gross margin falling from 12.3% to 6.5%[41] - The company recorded a net loss of HKD 172.4 million in 2021, compared to a profit of HKD 1.4 million in 2020, representing a decrease of HKD 173.8 million[44] Assets and Liabilities - Total assets decreased to HKD 1,953.1 million from HKD 2,192.6 million in 2020[6] - Non-current assets decreased to HKD 1,463.8 million from HKD 1,563.4 million in 2020[6] - Current liabilities decreased to HKD 265.3 million from HKD 373.7 million in 2020[6] - The company’s net asset value decreased to HKD 1,500.0 million from HKD 1,621.1 million in 2020[6] - Trade receivables decreased from HKD 200.1 million in 2020 to HKD 112.7 million in 2021, a reduction of 43.6%[30] - The current assets net value was HKD 225 million, down from HKD 265.8 million as of December 31, 2020, while the current ratio increased to 1.8 from 1.7[45] Impairment and Costs - The company recognized impairment losses of approximately HKD 110 million on property, plant, and equipment due to temporary production line shutdowns[3] - The group recognized impairment losses on property, plant, and equipment amounting to HKD 110,016,000 in 2021, with no such losses recorded in 2020[25] - The cost of inventory recognized as an expense was HKD 706,480,000 in 2021, down from HKD 912,500,000 in 2020, a decrease of about 22.6%[25] - The group’s employee costs were HKD 88,292,000 in 2021, a decrease from HKD 107,200,000 in 2020, representing a reduction of approximately 17.7%[25] - Total finance costs decreased to HKD 8,440,000 in 2021 from HKD 8,813,000 in 2020, reflecting a reduction of approximately 4.2%[23] Cash Flow and Borrowings - Cash net amount (bank balance and cash minus bank borrowings) increased to HKD 19.8 million from HKD 8.9 million in 2020[3] - As of December 31, 2021, the group's bank balances and cash amounted to HKD 246.7 million, a decrease from HKD 291.5 million as of December 31, 2020[45] - The total bank borrowings decreased from HKD 282.6 million as of December 31, 2020, to HKD 226.9 million as of December 31, 2021[45] - The net cash position (bank balances and cash minus total bank borrowings) improved to HKD 19.8 million from HKD 8.9 million as of December 31, 2020[45] Operational Insights - The manufacturing segment generated revenue of HKD 982,751,000 in 2021, down from HKD 1,303,388,000 in 2020, indicating a decrease of about 24.6%[20][22] - The company experienced a 15.7% decline in revenue in the second half of 2021 compared to the first half, and a 51.7% decline compared to the second half of 2020[39] - The upstream business revenue fell by 75.7% due to temporary production suspension, while downstream revenue increased by 8.4%[39] - Other income decreased from HKD 23.1 million in 2020 to HKD 17.9 million in 2021, primarily due to a reduction in scrap sales[41] Future Outlook and Strategy - The company anticipates that the global economy will continue to be affected by COVID-19 variants, but expects stable growth in the Chinese economy, leading to increased demand for corrugated packaging[48] - The company plans to continue coordinating with local governments regarding the licensing of existing coal-fired boilers and to expedite the installation of gas boilers[48] Corporate Governance - The audit committee has reviewed the unaudited financial results for the year ended December 31, 2021, but the audit process has been delayed due to various factors including asset valuation and site audit work in the Philippines[51] - The executive directors of the company are Mr. Xu Senping and Mr. Xu Sentai[63] - The independent non-executive directors include Mr. Chi Minsheng, Mr. Huang Zhuliang, and Ms. Zhou Shuming[63] Employment - The company employed approximately 805 full-time staff as of December 31, 2021, down from 1,050 in 2020[49]

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]

Financial Performance - The Group recorded a slight profit for the full year of 2020, rebounding from a loss in the first half due to a significant drop in domestic demand and raw material shortages [15]. - Revenue fell substantially in the first half of 2020 compared to the first half of 2019, but increased sharply in the second half as the Chinese economy recovered [13]. - In 2020, the Group recorded a revenue decrease of HK$153.7 million, representing a fall of 12.9% from HK$1,194.1 million in 2019 to HK$1,040.4 million in 2020 [33]. - The average selling price and sales volume rebounded in the second half of 2020, with revenue rising by 120.7% compared to the first half of 2020 and by 19.9% compared to the second half of 2019 [27]. - The gross profit increased from HK$115.3 million in 2019 to HK$127.9 million in 2020, representing an increase of 10.9%, with gross profit margin rising from 9.7% to 12.3% [34]. - Profit for the year was HK$1.4 million in 2020, compared to a loss of HK$7.9 million in 2019, representing an increase of profit by HK$9.3 million [41]. - The Group's main raw materials costs were slightly lower in 2020 compared to 2019, despite an increase in finance costs due to higher borrowing levels [29]. Cash and Liquidity - The Group's balance sheet ended 2020 with a net cash position, with total bank balances and cash exceeding total bank borrowings [15]. - As of December 31, 2020, the Group's bank balances and cash were HK$291.5 million, with over 80% held in Renminbi [42]. - As of December 31, 2020, the Group's bank borrowings increased from HK$216.9 million in 2019 to HK$282.6 million in 2020, with a net cash level of HK$8.9 million compared to HK$75.4 million in 2019 [43][47]. - The Group's net current assets rose to HK$265.8 million in 2020 from HK$186.6 million in 2019, resulting in a current ratio of 1.7, up from 1.5 in the previous year [44][47]. Production and Operations - The Group's corrugated packaging business primarily relies on domestic sales in China, which faced challenges due to the pandemic and government restrictions on waste paper imports [12]. - A new production line for converting waste paper into pulp was officially started in the second half of 2020 to secure raw materials for production [19]. - The Group plans to lease a new facility for a larger pulp line, expected to start trial operations at the end of 2021, to meet production needs and comply with import regulations [20]. - The Group plans to install a new large-scale pulp production line in the Philippines, expected to commence trial production by the end of 2021, to meet raw material needs and comply with import regulations [24]. - The Group aims to improve production processes and reduce wastage while controlling costs to mitigate rising operating expenses [22]. - The Group's focus remains on enhancing production efficiency, increasing sales volume, and reducing raw material and energy wastage to improve overall earnings [50][52]. Economic Outlook - The outlook for 2021 indicates that the Chinese economy will face pressure from the Sino-US trade war, but the Group remains optimistic about government policies supporting economic growth [21]. - The Group anticipates a global economic recovery in 2021, driven by mass vaccinations, which is expected to boost demand for corrugated packaging in China [50][52]. Corporate Governance - The Company has adopted the principles and code provisions of the Corporate Governance Code as the basis of its corporate governance practices [83]. - The Company has established a corporate governance framework and policies based on the Corporate Governance Code to enhance oversight on business conduct [84]. - The Company has complied with all code provisions of the Corporate Governance Code for the year ended December 31, 2020, except for provisions A.2.1, B.1.2, and C.3.3 [85]. - The Company has adopted a code of conduct regarding Directors' dealings in the Company's securities, which is no less exacting than the Model Code [86]. - All Directors have confirmed compliance with the Model Code and the Code of Conduct throughout the year ended December 31, 2020 [87]. - The Company has established written guidelines for employees regarding securities transactions, which are no less exacting than the Model Code [92]. - The Company has a senior management team with extensive experience in the corrugated packaging industry, including Mr. Tsui Yung Wai as General Manager [75]. - The Board currently comprises six Directors, consisting of three Executive Directors and three Independent Non-executive Directors [94]. - The Board consists of at least three Independent Non-executive Directors, representing one-third of the Board, with one possessing appropriate professional qualifications or financial management expertise [101]. Risk Management - The Company has developed various risk management procedures and guidelines for key business processes, including financial reporting and project management [173]. - Internal control assessments are conducted regularly across all divisions to identify risks impacting the business [174]. - The management has reported to the Board on the effectiveness of the risk management and internal control systems for the year ended December 31, 2020 [175]. - The Internal Audit Department is responsible for reviewing the adequacy and effectiveness of the risk management and internal control systems [176]. - The Company has implemented effective risk management and internal control systems, covering financial, operational, and compliance controls for the year ended December 31, 2020 [177]. Shareholder Engagement - The Company engages with shareholders through various communication channels to safeguard their interests and rights [189]. - Shareholders holding at least one-tenth of the paid-up capital can requisition an extraordinary general meeting for specified business transactions [193]. - The Company will reimburse reasonable expenses incurred by requisitionists if the Board fails to convene a requested extraordinary general meeting within 21 days [193]. - Detailed procedures for shareholders to propose a person for election as a Director are available on the Company's website [195].

Financial Performance - Revenue for the six months ended June 30, 2020, was HK$324,394,000, a decrease of 45.5% compared to HK$596,889,000 for the same period in 2019[12]. - Gross profit for the same period was HK$26,934,000, down 61.6% from HK$70,278,000 in 2019[12]. - Loss before taxation was HK$27,670,000, compared to a profit of HK$3,098,000 in the previous year[12]. - Loss attributable to owners of the Company for the period was HK$27,852,000, compared to a profit of HK$1,720,000 in 2019[12]. - Total comprehensive loss for the period attributable to owners was HK$58,357,000, compared to a comprehensive income of HK$1,931,000 in 2019[14]. - The company reported a loss for the period of HK$27,852,000, compared to a profit of HK$1,720,000 for the same period in 2019, indicating a significant downturn[22]. - The Group reported a segment loss of HK$11,573,000 for the first half of 2020, compared to a segment profit of HK$24,487,000 in the same period of 2019[56][59]. - The Group recorded a loss of HK$27.9 million in the first half of 2020, compared to a profit of HK$1.7 million in the same period of 2019[130]. Assets and Liabilities - Non-current assets decreased to HK$1,411,999,000 as of June 30, 2020, from HK$1,435,759,000 at the end of 2019[16]. - Current assets increased to HK$608,752,000 as of June 30, 2020, compared to HK$561,511,000 at the end of 2019[16]. - Total equity attributable to owners of the company decreased to HK$1,473,827,000 from HK$1,531,283,000, reflecting a decline of 3.8%[22]. - The company's unsecured bank borrowings increased significantly to HK$168,242,000 from HK$33,593,000, marking a rise of 400.0%[20]. - Total assets less current liabilities rose to HK$1,699,320,000 from HK$1,622,387,000, reflecting an increase of 4.7%[20]. - Unsecured bank borrowings increased to HK$328,174,000 as of June 30, 2020, compared to HK$216,856,000 as of December 31, 2019, reflecting an increase of approximately 51%[104]. Cash Flow - Operating cash flows before movements in working capital were HK$21,791,000, down 59.0% from HK$53,131,000 in the previous year[28]. - Cash generated from operations was negative at HK$21,340,000, contrasting sharply with positive cash flow of HK$115,768,000 in the prior year[28]. - Net cash used in investing activities was HK$51,370,000, which is an increase from HK$42,137,000 in the previous year, indicating higher investment outflows[29]. - The net cash from financing activities was HK$104,935,000, compared to a net cash outflow of HK$6,441,000 in the same period last year[31]. - Cash and cash equivalents at 30th June 2020 were HK$322,182,000, up from HK$285,656,000 at the end of the previous year, indicating an increase of 12.8%[31]. - Total cash and cash equivalents increased to HK$322.2 million as of June 30, 2020, up from HK$292.3 million at the end of 2019[133]. Inventory and Receivables - Inventories rose to HK$128,945,000 as of June 30, 2020, from HK$93,861,000 at the end of 2019[16]. - Trade and other receivables decreased to HK$106,039,000 as of June 30, 2020, from HK$168,833,000 at the end of 2019[16]. - Trade receivables decreased to HK$94,084,000 as of June 30, 2020, from HK$146,560,000 as of December 31, 2019[89]. - The average age of trade receivables increased to 68 days as of June 30, 2020, compared to 49 days as of December 31, 2019[94]. Segment Performance - The external sales for Containerboard segment were HK$98,902,000, while the Corrugated Packaging segment generated HK$225,492,000[56]. - Revenue from containerboard sales decreased by 67% and revenue from corrugated packaging sales fell by 25% compared to the first half of 2019[122]. - Containerboard and corrugated packaging accounted for 30% and 70% of revenue, respectively, with equipment utilization at 35% and 40%[122]. Corporate Governance and Shareholder Information - The Company did not engage its Auditor to review the financial information in its interim report, leading to a deviation from Code Provision C.3.3[189]. - The Remuneration Committee reviews and makes recommendations on the remuneration packages of Directors only, not senior management, which is a deviation from Code Provision B.1.2[189]. - The Company has adopted a code of conduct for Directors' dealings in the Company's securities that is no less exacting than the Model Code for Securities Transactions[194]. - The Group employed around 1,000 full-time staff as of June 30, 2020, maintaining the same workforce level as of December 31, 2019[180]. Future Outlook - The Group anticipates a subdued global economy in the second half of 2020 due to the COVID-19 pandemic and ongoing Sino-US trade tensions[139]. - The Group aims to improve production efficiency and reduce costs to enhance long-term profitability despite rising operational costs[141]. - A new pulp production line is under construction in Southeast Asia, expected to start production by the end of 2020, to meet upstream raw material requirements[140].

Financial Performance - The group's other expenses for the year ended December 31, 2019, amounted to approximately HKD 18,200,000, a decrease of 23.5% from HKD 23,700,000 in 2018[2] - The total other expenses for 2019 were HKD 18,168,000 compared to HKD 23,665,000 in 2018, indicating a significant reduction[3] Expense Breakdown - Breakdown of other expenses includes: China other taxes at HKD 6,652,000 (down from HKD 11,585,000), depreciation at HKD 8,936,000 (up from HKD 6,876,000), legal and professional fees at HKD 1,280,000 (up from HKD 942,000), and other expenses at HKD 1,300,000 (down from HKD 4,262,000)[3] Strategic Developments - The company has not disclosed any new product developments or technological advancements in this announcement[4] - There are no updates on market expansion or mergers and acquisitions in the provided information[4] - The board of directors remains unchanged as of the announcement date, with no new strategic initiatives mentioned[4]

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].