[Summary](index=1&type=section&id=Summary) Wah Sun Handbags reported significant growth in revenue, gross profit, net profit, and EPS for FY2024, proposing final and special dividends 2024 Financial Highlights | Indicator | FY2024 (Approx.) | FY2023 (Approx.) | Change | | :--- | :--- | :--- | :--- | | Revenue | HK$594,400,000 | HK$446,500,000 | Increased 33.1% | | Gross Profit | HK$105,000,000 | HK$67,600,000 | Increased 55.4% | | Gross Profit Margin | 17.7% | 15.1% | Increased 2.6% | | Profit attributable to owners of the Company | HK$28,500,000 | HK$8,500,000 | Increased 235.5% | | Earnings per share attributable to owners of the Company | HK$0.07 | HK$0.021 | Increased HK$0.049 | | Impairment provision for trade receivables | HK$2,700,000 | Reversal of HK$4,300,000 | Turned to provision | | Proposed final dividend | HK$0.02 per share | HK$0 | Increased | | Proposed special dividend | HK$0.01 per share | HK$0.01 per share | Unchanged | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the consolidated income statement, comprehensive income, and financial position, detailing the company's financial performance and balance sheet status [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) For FY2024, the company achieved substantial growth in revenue, gross profit, and operating profit, with profit for the year reaching HK$27,211 thousand Key Data from Consolidated Income Statement (HK$ thousand) | Indicator | FY2024 | FY2023 | | :--- | :--- | :--- | | Revenue | 594,407 | 446,518 | | Cost of sales | (489,412) | (378,964) | | Gross Profit | 104,995 | 67,554 | | Other income | 3,986 | 1,794 | | Other gains, net | 3,444 | 5,870 | | Selling and distribution expenses | (24,862) | (20,528) | | Administrative expenses | (50,927) | (47,111) | | Impairment provision for trade receivables / reversal | (2,669) | 4,319 | | Operating profit | 33,967 | 11,898 | | Finance costs, net | (1,054) | (2,204) | | Profit before income tax | 32,913 | 9,694 | | Income tax expense | (5,702) | (3,687) | | Profit for the year | 27,211 | 6,007 | | Profit attributable to owners of the Company | 28,504 | 8,495 | | Non-controlling interests | (1,293) | (2,488) | | Basic and diluted earnings per share (HK cents) | 7.0 | 2.1 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the year was HK$27,175 thousand, driven by profit for the year and slightly impacted by exchange differences Key Data from Consolidated Statement of Comprehensive Income (HK$ thousand) | Indicator | FY2024 | FY2023 | | :--- | :--- | :--- | | Profit for the year | 27,211 | 6,007 | | Other comprehensive (loss) / income: Exchange differences | (36) | (126) | | Total comprehensive income for the year | 27,175 | 5,881 | | Attributable to owners of the Company | 28,468 | 8,369 | | Non-controlling interests | (1,293) | (2,488) | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, total assets slightly decreased, but a robust current ratio and increased total equity reflect a healthy financial structure Key Data from Consolidated Statement of Financial Position (HK$ thousand) | Indicator | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 69,378 | 76,431 | | Current assets | 301,930 | 305,946 | | **Total Assets** | **371,308** | **382,377** | | **Equity** | | | | Equity attributable to owners of the Company | 259,329 | 247,206 | | Non-controlling interests | (3,942) | (2,649) | | **Total Equity** | **255,387** | **244,557** | | **Liabilities** | | | | Non-current liabilities | 17,662 | 20,419 | | Current liabilities | 98,259 | 117,401 | | **Total Liabilities** | **115,921** | **137,820** | | Total Equity and Liabilities | 371,308 | 382,377 | [Notes](index=6&type=section&id=Notes) This section provides detailed notes to the consolidated financial statements, covering general information, accounting policies, segment data, financial item specifics, and post-reporting period events [1. General Information](index=6&type=section&id=1.%20General%20Information) The company is an investment holding entity primarily manufacturing and trading handbags, controlled by the Ma family, with financial statements presented in HKD - The Company is an investment holding company, with its principal business being the manufacturing and trading of handbag products[13](index=13&type=chunk) - The ultimate holding company is Wah Sun International Holdings Limited, and the ultimate controlling parties are members of the Ma family[13](index=13&type=chunk) - The consolidated financial statements are presented in Hong Kong dollars, with all values rounded to the nearest thousand[14](index=14&type=chunk) [2. Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=2.%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The Group's consolidated financial statements, prepared under HKFRS, adopted new standards with no significant impact on performance or financial position - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance Cap. 622, using the historical cost basis[15](index=15&type=chunk) - The Group first applied several new and amended standards for the financial year beginning April 1, 2023, which had no significant impact on its results or financial position[17](index=17&type=chunk) - Amendments to standards that have been issued but are not yet effective are not expected to have a significant impact on the Group's current or future reporting periods[18](index=18&type=chunk) [3. Segment Information](index=8&type=section&id=3.%20Segment%20Information) The Group operates solely in handbag manufacturing and trading, with revenue primarily from the US, non-current assets in Cambodia, and high customer concentration - The Group has only one operating segment, which is the manufacturing and trading of handbag products, thus no separate segment analysis is presented[19](index=19&type=chunk) Revenue by Geographical Area (HK$ thousand) | Region | FY2024 | FY2023 | | :--- | :--- | :--- | | United States of America | 485,560 | 347,326 | | Canada | 45,873 | 26,585 | | Other countries | 62,974 | 72,607 | | **Total Revenue** | **594,407** | **446,518** | Non-current Assets by Location (HK$ thousand) | Region | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | People's Republic of China | 10,825 | 16,716 | | Hong Kong | 10,834 | 9,861 | | Kingdom of Cambodia | 42,975 | 45,967 | | **Total** | **64,634** | **72,544** | Revenue from Major Customers (HK$ thousand) | Customer | FY2024 | FY2023 | | :--- | :--- | :--- | | Customer A | 172,882 | 113,272 | | Customer B | 136,729 | 132,886 | | Customer C | 128,200 | 77,791 | | Customer D | 102,202 | 50,072 | | Customer E | – | 32,581 | | **Total** | **540,013** | **406,602** | [4. Revenue, Other Income and Other Gains, Net](index=9&type=section&id=4.%20Revenue%2C%20Other%20Income%20and%20Other%20Gains%2C%20Net) This year's revenue primarily stemmed from goods sales, with other income and net gains influenced by exchange gains and rental income Revenue Sources (HK$ thousand) | Item | FY2024 | FY2023 | | :--- | :--- | :--- | | Sale of goods | 594,407 | 446,518 | Other Income and Other Gains, Net (HK$ thousand) | Item | FY2024 | FY2023 | | :--- | :--- | :--- | | Rental income from operating leases | 3,963 | 1,565 | | Gain on disposal of scrap materials | 23 | 229 | | **Total Other Income** | **3,986** | **1,794** | | Net exchange gain | 3,225 | 5,486 | | Government grants | 181 | 343 | | Fair value change of financial assets at fair value through profit or loss | 42 | 41 | | Loss on disposal of property, plant and equipment | (4) | – | | **Total Other Gains, Net** | **3,444** | **5,870** | | **Total** | **7,430** | **7,664** | [5. Expenses by Nature](index=10&type=section&id=5.%20Expenses%20by%20Nature) Total cost of sales, selling and distribution, and administrative expenses significantly increased, driven by higher inventory costs and employee benefits Total Expenses by Nature (HK$ thousand) | Item | FY2024 | FY2023 | | :--- | :--- | :--- | | Cost of inventories sold | 293,869 | 198,788 | | Subcontracting fees | 65,546 | 58,621 | | Transportation and customs duties | 14,428 | 12,806 | | Employee benefit expenses | 149,385 | 137,124 | | Depreciation of property, plant and equipment | 5,846 | 6,727 | | Depreciation of investment properties | 2,144 | 1,073 | | Depreciation of right-of-use assets | 3,643 | 3,284 | | **Total Cost of Sales, Selling and Distribution Expenses and Administrative Expenses** | **565,201** | **446,603** | [6. Finance Costs, Net](index=10&type=section&id=6.%20Finance%20Costs%2C%20Net) Net finance costs significantly decreased this year, primarily due to a substantial increase in interest income from bank deposits Finance Costs, Net (HK$ thousand) | Item | FY2024 | FY2023 | | :--- | :--- | :--- | | Interest expense on bills payable | (3,282) | (2,021) | | Interest expense on lease liabilities | (1,119) | (1,190) | | **Total Finance Costs** | **(4,401)** | **(3,211)** | | Interest income from bank deposits | 3,347 | 1,007 | | **Finance Costs, Net** | **(1,054)** | **(2,204)** | [7. Income Tax Expense](index=11&type=section&id=7.%20Income%20Tax%20Expense) Income tax expense significantly rose this year due to increased taxable profit, including Hong Kong profits tax and overseas taxes Income Tax Expense (HK$ thousand) | Item | FY2024 | FY2023 | | :--- | :--- | :--- | | Current income tax: Hong Kong profits tax | 3,509 | 1,884 | | Current income tax: Overseas tax | 3,041 | 1,493 | | Underprovision in prior years | 3 | 392 | | Deferred income tax | (851) | (82) | | **Total Income Tax Expense** | **5,702** | **3,687** | - Hong Kong profits tax is provided at **16.5%** (8.25% for the first HK$2,000,000), Cambodian corporate income tax rate is **20%**, and Chinese corporate income tax rate is **25%**[68](index=68&type=chunk)[45](index=45&type=chunk) [8. Dividends](index=11&type=section&id=8.%20Dividends) The Board proposed a final dividend of HK$0.02 and a special dividend of HK$0.01 per share, totaling HK$12,259 thousand, a substantial increase Declared and Proposed Dividends (HK$ thousand) | Item | FY2024 | FY2023 | | :--- | :--- | :--- | | Interim dividend declared and paid of HK$0.02 per share (2023: HK$0.01 per share) | 8,173 | 4,086 | | Interim special dividend declared and paid of HK$0.01 per share (2023: nil) | 4,086 | – | | **Total Interim Dividends Declared and Paid** | **12,259** | **4,086** | | Proposed final dividend of HK$0.02 per share (2023: nil) | 8,173 | – | | Proposed special dividend of HK$0.01 per share (2023: HK$0.01 per share) | 4,086 | 4,086 | | **Total Proposed Final and Special Dividends** | **12,259** | **4,086** | | **Total Dividends Attributable for the Year** | **24,518** | **8,172** | - The proposed final and special dividends are subject to shareholders' approval at the Annual General Meeting[45](index=45&type=chunk) [9. Earnings Per Share](index=12&type=section&id=9.%20Earnings%20Per%20Share) Basic earnings per share significantly grew to HK$0.07, matching diluted EPS, indicating enhanced company profitability Earnings Per Share (HK cents) | Indicator | FY2024 | FY2023 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (HK$ thousand) | 28,504 | 8,495 | | Weighted average number of ordinary shares in issue (thousand shares) | 408,626 | 408,626 | | Basic earnings per share (HK cents) | 7.0 | 2.1 | - Diluted earnings per share is the same as basic earnings per share as there are no potential dilutive ordinary shares outstanding[47](index=47&type=chunk) [10. Right-of-use Assets and Lease Liabilities](index=12&type=section&id=10.%20Right-of-use%20Assets%20and%20Lease%20Liabilities) Right-of-use assets and lease liabilities decreased, reflecting changes in leasing activities, with total lease cash outflows of HK$4,793 thousand Right-of-use Assets and Lease Liabilities (HK$ thousand) | Item | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | Right-of-use assets | 20,160 | 22,694 | | Lease liabilities (current) | 3,882 | 3,408 | | Lease liabilities (non-current) | 17,662 | 20,419 | | **Total Lease Liabilities** | **21,544** | **23,827** | Lease-related Amounts Recognized in Consolidated Income Statement (HK$ thousand) | Item | FY2024 | FY2023 | | :--- | :--- | :--- | | Depreciation of right-of-use assets | (3,643) | (3,284) | | Interest expense | (1,119) | (1,190) | | Expenses relating to short-term leases | (284) | (289) | - Total cash outflow for leases for the year ended March 31, 2024, was approximately **HK$4,793 thousand**[50](index=50&type=chunk) [11. Investment Properties](index=13&type=section&id=11.%20Investment%20Properties) Investment property value decreased due to depreciation and exchange differences; the Group uses the cost model and reclassified its Dongguan factory for rental income Movement in Investment Properties (HK$ thousand) | Item | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | At beginning of year | 5,900 | 5,900 | | Depreciation expense | (2,144) | (1,073) | | Exchange differences | (4) | (7) | | **At end of year** | **3,752** | **5,900** | - The Group measures investment properties using the cost model and reclassified its old Dongguan factory as investment property to generate rental income[52](index=52&type=chunk)[101](index=101&type=chunk) - The fair value of investment properties as of March 31, 2024, was **HK$5,567 thousand**, calculated using the income approach with discounted cash flow analysis[74](index=74&type=chunk) [12. Inventories](index=14&type=section&id=12.%20Inventories) Total inventories significantly decreased this year, driven by reductions in raw materials, work-in-progress, and finished goods Inventories Composition (HK$ thousand) | Item | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | Raw materials | 20,382 | 46,235 | | Work-in-progress | 24,840 | 48,373 | | Finished goods | 22,641 | 33,977 | | **Total** | **67,863** | **128,585** | - For the year ended March 31, 2024, the cost of inventories recognized as an expense and included in "cost of sales" in the consolidated income statement was **HK$293,869 thousand**[103](index=103&type=chunk) [13. Trade Receivables, Prepayments, Deposits and Other Receivables](index=15&type=section&id=13.%20Trade%20Receivables%2C%20Prepayments%2C%20Deposits%20and%20Other%20Receivables) Net trade receivables and impairment provisions increased, with the aging analysis indicating the largest proportion of receivables within 30 days Trade Receivables, Prepayments, Deposits and Other Receivables (HK$ thousand) | Item | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | Trade receivables | 55,016 | 38,667 | | Less: Impairment provision for trade receivables | (4,943) | (2,274) | | **Trade Receivables, Net** | **50,073** | **36,393** | | Deposits | 1,603 | 1,483 | | Prepayments | 9,590 | 6,029 | | Recoverable VAT | 5,800 | 4,722 | | Other receivables | – | 3 | | Accrued income | 863 | 1,536 | | **Total** | **67,929** | **50,166** | Aging Analysis of Trade Receivables (HK$ thousand) | Aging | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | Within 30 days | 41,334 | 37,771 | | 31 to 60 days | 7,034 | 849 | | 61 to 90 days | 4,771 | 2 | | Over 90 days | 1,877 | 45 | | **Total** | **55,016** | **38,667** | Movement in Impairment Provision for Trade Receivables (HK$ thousand) | Item | FY2024 | FY2023 | | :--- | :--- | :--- | | At beginning of year | 2,274 | 37,366 | | Impairment provision / (reversal) | 2,669 | (4,319) | | Write-off | – | (30,773) | | **At end of year** | **4,943** | **2,274** | [14. Trade and Bills Payables, Accrued Expenses and Other Payables](index=16&type=section&id=14.%20Trade%20and%20Bills%20Payables%2C%20Accrued%20Expenses%20and%20Other%20Payables) Total trade and bills payables decreased, while accrued expenses and other payables slightly increased, reflecting sound current liability management Trade and Bills Payables, Accrued Expenses and Other Payables (HK$ thousand) | Item | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | Trade payables | 55,565 | 60,126 | | Bills payable | 12,594 | 32,977 | | **Total Trade and Bills Payables** | **68,159** | **93,103** | | Accrued salaries | 9,690 | 8,917 | | Other accrued expenses and payables | 12,136 | 11,142 | | Contract liabilities | 447 | 316 | | **Total Accrued Expenses and Other Payables** | **22,273** | **20,375** | | **Total** | **90,432** | **113,478** | Aging Analysis of Trade and Bills Payables (HK$ thousand) | Aging | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | Within 30 days | 39,822 | 61,224 | | 31 to 60 days | 10,942 | 13,824 | | 61 to 90 days | 9,881 | 5,434 | | Over 90 days | 7,514 | 12,621 | | **Total** | **68,159** | **93,103** | [15. Events After the Reporting Period](index=17&type=section&id=15.%20Events%20After%20the%20Reporting%20Period) Post-reporting period, the Group completed the acquisition of its Hong Kong office on April 30, 2024, for approximately HK$4,700 thousand - The Group entered into an acquisition agreement with two related parties on March 25, 2024, to acquire its Hong Kong office for approximately **HK$4,700 thousand**[81](index=81&type=chunk) - The acquisition was completed on April 30, 2024, after the year-end[81](index=81&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section details the annual business review, industry overview, future outlook, and financial performance, highlighting the company's strategies and financial stability in a complex operating environment [Business Review](index=18&type=section&id=Business%20Review) Despite US market risks, the Group achieved significant revenue and net profit growth, driven by North American recovery and Cambodian production advantages - The Group is an original equipment manufacturer (OEM) of non-leather handbags, primarily engaged in the manufacturing and trading of handbag products[82](index=82&type=chunk) - The global economy saw an initial recovery, but the US consumer market faces increased downside risks due to rising interest rates and inflation[83](index=83&type=chunk) - The Cambodian production base accounts for approximately **90%** of total production capacity, becoming a crucial supply chain resource due to improved costs, efficiency, and profitability[114](index=114&type=chunk) - Revenue increased by **33.1%** to **HK$594,400 thousand**, and profit attributable to owners of the Company increased by **HK$20,000 thousand** to **HK$28,500 thousand**, primarily driven by the North American market recovery[85](index=85&type=chunk) - Management enhanced competitiveness through cost optimization, upgrading production facilities, and streamlining production processes, and completed the acquisition of the Hong Kong office post-reporting period to improve operating cash flow[85](index=85&type=chunk)[116](index=116&type=chunk) [Industry Overview](index=19&type=section&id=Industry%20Overview) Handbag trends favor practical, sustainable products, with strong non-leather market growth, significant online retail expansion in Asia-Pacific, and North America retaining dominance - Modern consumers seek handbags that combine aesthetics, practicality, and functionality, with an increasing preference for sustainable and eco-friendly products[88](index=88&type=chunk) - The global non-leather product market achieved strong growth due to increased awareness of animal cruelty and the promulgation of regulatory policies[117](index=117&type=chunk) - Spending on online platforms increased, with start-up e-retailers and e-commerce websites gaining more attention, though physical stores still play an important role[88](index=88&type=chunk) - The North American market is expected to maintain its dominant position, while online retail in the Asia-Pacific market has grown significantly[119](index=119&type=chunk) [Prospects](index=21&type=section&id=Prospects) Amid geopolitical and economic uncertainties, management will maintain financial health, enhance efficiency, and explore new revenue streams for sustainable returns - The global economy is expected to remain affected by geopolitical uncertainties in the upcoming financial year, with increased downside risks[121](index=121&type=chunk) - Management will continue to adopt prudent measures to maintain a healthy financial position and enhance manufacturing efficiency and production flexibility[91](index=91&type=chunk) - The Group will seek new revenue sources and balanced growth to create sustainable returns for shareholders[91](index=91&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) Strong financial performance this year saw significant growth in revenue, gross profit, and net profit, driven by North American recovery and cost control, ensuring robust financial health and liquidity [Revenue](index=21&type=section&id=Revenue) Revenue grew 33.1% to HK$594,400 thousand, primarily driven by North American market recovery, with Cambodian production contributing most revenue - The Group's revenue increased by **33.1%** from **HK$446,500 thousand** in FY2023 to **HK$594,400 thousand** in the current year[122](index=122&type=chunk) - Revenue from US customers increased by approximately **HK$138,300 thousand** to **HK$485,600 thousand**, mainly due to the continued recovery of the North American market after the COVID-19 pandemic[122](index=122&type=chunk) Sales Revenue by Production Location (HK$ thousand) | Production Location | FY2024 | Share (%) | FY2023 | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Cambodia | 557,516 | 93.8 | 408,996 | 91.6 | | Dongguan, China | 36,891 | 6.2 | 37,522 | 8.4 | | **Total** | **594,407** | **100** | **446,518** | **100** | Total Revenue, Sales Volume and Average Selling Price | Indicator | FY2024 | FY2023 | | :--- | :--- | :--- | | Revenue (HK$ thousand) | 594,407 | 446,518 | | Sales Volume (thousand units) | 8,123 | 5,450 | | Average Selling Price (HK$/unit) | 73.2 | 81.9 | - The decrease in average selling price was due to the different complexity of products sold[124](index=124&type=chunk) - The Group's sales to its top five customers accounted for approximately **98%** of total revenue this year, with sales to the single largest customer accounting for approximately **29%**[153](index=153&type=chunk) [Cost of Sales](index=22&type=section&id=Cost%20of%20Sales) Cost of sales increased 29.1% to HK$489,400 thousand, but at a slower rate than sales, thanks to strict cost control - Cost of sales increased by **29.1%** from **HK$379,000 thousand** in FY2023 to **HK$489,400 thousand** in the current year[154](index=154&type=chunk) - The increase in cost of sales was lower than the increase in sales, primarily due to the implementation of strict cost control measures, successfully reducing basic production operating costs[154](index=154&type=chunk) [Gross Profit and Gross Profit Margin](index=23&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit increased 55.4% to HK$105,000 thousand, with gross profit margin rising 2.6% to 17.7%, indicating significant profitability improvement - Gross profit increased by **55.4%** from **HK$67,600 thousand** in FY2023 to **HK$105,000 thousand** in the current year[155](index=155&type=chunk) - Gross profit margin increased by **2.6%** from **15.1%** in FY2023 to **17.7%** in the current year[155](index=155&type=chunk) [Other Gains, Net](index=23&type=section&id=Other%20Gains%2C%20Net) Other net gains, primarily from exchange and scrap sales, saw a decrease in net exchange gains this year - Other gains primarily included net exchange gains of approximately **HK$3,200 thousand** (FY2023: HK$5,500 thousand), mainly from the depreciation of RMB against HKD[97](index=97&type=chunk) - Gain on disposal of scrap materials was approximately **HK$200 thousand** (FY2023: HK$300 thousand)[97](index=97&type=chunk) [Selling and Distribution Expenses](index=23&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses rose 21.1% to HK$24,900 thousand, mainly due to increased sales activities - Selling and distribution expenses increased by **21.1%** from **HK$20,500 thousand** in FY2023 to **HK$24,900 thousand** in the current year[127](index=127&type=chunk) - This was primarily due to increased sales activities[127](index=127&type=chunk) [Administrative Expenses](index=23&type=section&id=Administrative%20Expenses) Administrative expenses increased 8.1% to HK$50,900 thousand, primarily due to higher employee benefit expenses - Administrative expenses increased by **8.1%** from **HK$47,100 thousand** in FY2023 to **HK$50,900 thousand** in the current year[157](index=157&type=chunk) - This was primarily due to increased employee benefit expenses[157](index=157&type=chunk) [Impairment Provision for Trade Receivables / Reversal](index=24&type=section&id=Impairment%20Provision%20for%20Trade%20Receivables%20%2F%20Reversal) Impairment provision for trade receivables was HK$2,700 thousand this year, a shift from last year's HK$4,300 thousand reversal, reflecting credit risk changes - Impairment provision for trade receivables was approximately **HK$2,700 thousand** this year, compared to a reversal of **HK$4,300 thousand** in FY2023[158](index=158&type=chunk) - The impairment assessment considered the aging of trade receivables, customer repayment history, payment status, creditworthiness, and macroeconomic forward-looking factors[99](index=99&type=chunk) [Finance Costs, Net](index=24&type=section&id=Finance%20Costs%2C%20Net) Net finance costs decreased 52.2% to HK$1,100 thousand, primarily driven by increased interest income - Net finance costs decreased by **52.2%** from **HK$2,200 thousand** in FY2023 to **HK$1,100 thousand** in the current year[100](index=100&type=chunk) - This was primarily due to increased interest income in the current year[100](index=100&type=chunk) [Income Tax Expense](index=24&type=section&id=Income%20Tax%20Expense) Income tax expense increased 54.7% to HK$5,700 thousand, primarily due to higher taxable profit - Income tax expense increased by **54.7%** from **HK$3,700 thousand** in FY2023 to **HK$5,700 thousand** in the current year[160](index=160&type=chunk) - This was primarily due to increased taxable profit in the current year[160](index=160&type=chunk) [Profit for the Year](index=24&type=section&id=Profit%20for%20the%20Year) Profit for the year surged 353.0% to HK$27,200 thousand, with net profit margin rising to 4.6%, indicating significant profitability improvement - Profit for the year significantly increased by **353.0%** from **HK$6,000 thousand** in FY2023 to **HK$27,200 thousand** in the current year[161](index=161&type=chunk) - Net profit margin increased from **1.3%** in FY2023 to **4.6%** in the current year, primarily due to the net effect of increased gross profit margin, increased selling and distribution expenses, and increased income tax expense[130](index=130&type=chunk) [Financial Position, Liquidity and Financial Resources](index=24&type=section&id=Financial%20Position%2C%20Liquidity%20and%20Financial%20Resources) The Group maintains a robust financial position with no bank borrowings, ensuring funding flexibility through retained bank balances and committed credit facilities - As of March 31, 2024, the Group had **no bank borrowings**[162](index=162&type=chunk) - The Group aims to maintain funding flexibility through retaining sufficient bank balances, available committed credit facilities, and interest-bearing borrowings[163](index=163&type=chunk) [Borrowings and Pledges of Assets](index=24&type=section&id=Borrowings%20and%20Pledges%20of%20Assets) Bank financing is secured by approximately HK$25,100 thousand in bank deposits - As of March 31, 2024, bank financing was secured by bank deposits of approximately **HK$25,100 thousand**[131](index=131&type=chunk) [Foreign Exchange Risk](index=24&type=section&id=Foreign%20Exchange%20Risk) The Group faces primary RMB foreign exchange risk, with minimal USD risk due to the HKD peg, and currently undertakes no hedging activities - The Group primarily operates in Hong Kong, Cambodia, and China, with most transactions settled in HKD, USD, and RMB[164](index=164&type=chunk) - Due to the HKD peg to the USD, the USD foreign exchange risk is minimal, and the Group is primarily exposed to foreign exchange risk related to RMB[165](index=165&type=chunk) - Foreign exchange risk on financial assets and liabilities denominated in other currencies was not significant this year, hence no hedging activities were undertaken[134](index=134&type=chunk) [Working Capital Management](index=25&type=section&id=Working%20Capital%20Management) The Group maintains sound financial policies, funding working capital primarily through operating cash flow, ensuring sufficient funds for current and future needs - The Group is committed to maintaining sound financial policies and enhancing operational efficiency to improve the robustness of its working capital[166](index=166&type=chunk) - This year, the Group primarily funded its working capital requirements through net cash generated from operating activities and bank borrowings[166](index=166&type=chunk) - As of March 31, 2024, cash and cash equivalents amounted to approximately **HK$141,100 thousand**[166](index=166&type=chunk) [Liquidity Ratios](index=25&type=section&id=Liquidity%20Ratios) The Group maintains a net cash position and robust liquidity and gearing ratios, reflecting its sound financial condition Liquidity Ratios | Indicator | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 3.1 | 2.6 | | Gearing Ratio | Not applicable | Not applicable | | Net Debt to Equity Ratio | Net cash | Net cash | - The current ratio is calculated by dividing total current assets by total current liabilities[137](index=137&type=chunk) - The gearing ratio is calculated by dividing total debt by total equity and multiplying by 100%[167](index=167&type=chunk) - The net debt to equity ratio is calculated by dividing net debt (total borrowings less cash and cash equivalents) by total equity[138](index=138&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) This section covers environmental policy, employee and remuneration, major investments, contingent liabilities, post-reporting events, dividends, corporate governance, and results publication [Environmental Policy](index=26&type=section&id=Environmental%20Policy) The Group adheres to environmental standards, integrates ESG into operations, and reported no significant environmental violations this year - The Group is committed to complying with all environmental standards and policies, and no significant incidents of non-compliance with relevant environmental protection laws and regulations occurred this year[170](index=170&type=chunk) - The Group's ESG strategy is based on the core principles of "Safety, Quality, and Environmental Sustainability" and will be regularly reviewed to ensure its relevance[170](index=170&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of March 31, 2024, the Group employed 4,273 staff, regularly reviewing remuneration, bonuses, and benefits for competitiveness - As of March 31, 2024, the Group employed a total of **4,273 employees** (2023: 3,477 employees)[171](index=171&type=chunk) - The Group regularly reviews employee remuneration levels, performance bonus schemes, and other benefits to ensure a competitive remuneration policy[171](index=171&type=chunk) - The Company has adopted a share option scheme and provides on-the-job training for employees[142](index=142&type=chunk) - Employee costs (including directors' emoluments) for the year amounted to approximately **HK$149,400 thousand** (FY2023: HK$137,100 thousand)[171](index=171&type=chunk) [Material Investments / Material Acquisitions and Disposals](index=26&type=section&id=Material%20Investments%20%2F%20Material%20Acquisitions%20and%20Disposals) Aside from the disclosed Hong Kong office acquisition, the Group made no other material investments, acquisitions, or disposals this year - Save as disclosed in this announcement, the Group did not make any other material investments or material acquisitions and disposals of subsidiaries, associates, or joint ventures during the year[143](index=143&type=chunk) [Future Plans for Material Investments or Capital Assets](index=26&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of March 31, 2024, the Group had no other future plans for material investments and capital assets - As of March 31, 2024, the Group had no other future plans for material investments and capital assets[144](index=144&type=chunk) [Capital Commitments](index=26&type=section&id=Capital%20Commitments) As of March 31, 2024, the Group had no significant contracted capital expenditure for property, plant, and equipment - As of March 31, 2024, the Group had no significant contracted but unprovided capital expenditure for the acquisition of property, plant, and equipment[145](index=145&type=chunk) [Contingent Liabilities](index=27&type=section&id=Contingent%20Liabilities) As of March 31, 2024, the Group had no significant contingent liabilities - As of March 31, 2024, the Group had no significant contingent liabilities[146](index=146&type=chunk) [Significant Events After Reporting Period](index=27&type=section&id=Significant%20Events%20After%20Reporting%20Period) Aside from the disclosed Hong Kong office acquisition, no other significant events affecting the Company occurred post-reporting period - Save as disclosed in this announcement, no other significant events affecting the Company and its subsidiaries occurred after the reporting period and up to the date of this announcement[174](index=174&type=chunk) [Dividends](index=27&type=section&id=Dividends) The Board recommended final and special dividends, announcing share registration suspension for the AGM and dividend entitlement [Proposed Final and Special Dividends](index=27&type=section&id=Proposed%20Final%20and%20Special%20Dividends) The Board proposed a final dividend of HK$0.02 and a special dividend of HK$0.01 per share, totaling HK$12,259 thousand, payable October 31, 2024, pending approval - The Board proposed a final dividend of **HK$0.02 per share** and a special dividend of **HK$0.01 per share** for the year, totaling approximately **HK$12,259 thousand**[148](index=148&type=chunk) - The proposed final and special dividends are subject to shareholders' approval at the 2024 Annual General Meeting and are expected to be paid on October 31, 2024[185](index=185&type=chunk) [Closure of Register of Members](index=27&type=section&id=Closure%20of%20Register%20of%20Members) Share registration will be suspended in two periods to determine shareholder eligibility for the AGM and proposed dividends - To determine the eligibility of shareholders to attend and vote at the 2024 Annual General Meeting, the register of members will be closed from **August 28, 2024, to September 2, 2024** (both dates inclusive)[186](index=186&type=chunk) - To determine the entitlement of shareholders to the proposed final and special dividends, the register of members will be closed from **October 10, 2024, to October 16, 2024** (both dates inclusive)[187](index=187&type=chunk) [Corporate Governance](index=28&type=section&id=Corporate%20Governance) The Company complies with Listing Rules' Corporate Governance Code and Model Code for Directors' Securities Transactions, with the preliminary announcement reviewed by the independent auditor [Model Code for Securities Transactions by Directors](index=28&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Listing Rules' Model Code for Directors' Securities Transactions, with all current directors confirming compliance this year - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions[178](index=178&type=chunk) - All current directors confirmed compliance with the required standards of dealing set out in the Model Code during the year[178](index=178&type=chunk) [Review of Preliminary Announcement](index=28&type=section&id=Review%20of%20Preliminary%20Announcement) Performance figures in this preliminary announcement were agreed with PricewaterhouseCoopers, but their work does not constitute an assurance engagement - The performance figures for the Group's results for the year in this preliminary announcement have been agreed with the independent auditor, PricewaterhouseCoopers[152](index=152&type=chunk) - The work performed by the independent auditor does not constitute an assurance engagement, and therefore no assurance is provided on this preliminary announcement[152](index=152&type=chunk) [Review of Annual Results by Audit Committee](index=29&type=section&id=Review%20of%20Annual%20Results%20by%20Audit%20Committee) The Audit Committee, with management and the independent auditor, reviewed the Group's accounting principles, audit, internal controls, and financial reporting, including consolidated financial statements - The Audit Committee, comprising all independent non-executive directors, has reviewed the accounting principles and practices adopted by the Group with management and the independent auditor[180](index=180&type=chunk)[190](index=190&type=chunk) - The Audit Committee has discussed audit, internal control, and financial reporting matters, including the review of the consolidated financial statements[190](index=190&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, redeemed, or sold any listed securities during the year - During the year, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of its listed securities[191](index=191&type=chunk) [Publication of Results Announcement and Annual Report](index=29&type=section&id=Publication%20of%20Results%20Announcement%20and%20Annual%20Report) This announcement is published on HKEX and the Company's website; the annual report will be published and dispatched to shareholders as per Listing Rules - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.wahsun.com.hk)[192](index=192&type=chunk) - The Company's annual report for the year will be published on the aforementioned websites and dispatched to shareholders who request printed copies in due course, as required by the Listing Rules[192](index=192&type=chunk) [Acknowledgement](index=29&type=section&id=Acknowledgement) The Board expresses sincere gratitude to management, employees, shareholders, business partners, and other professionals - The Board extends its sincere gratitude to the management and all employees of the Group for their efforts and dedication, and to the shareholders, business partners, and other professionals for their support throughout the year[193](index=193&type=chunk)

Financial Performance - For the six months ended September 30, 2023, the company's revenue increased by approximately HKD 86.9 million or 35.1% to HKD 334.5 million compared to the same period in 2022[14]. - The profit attributable to the owners of the company rose from approximately HKD 7.3 million in the first half of 2022 to approximately HKD 20.9 million in the first half of 2023, an increase of about HKD 13.6 million[14]. - Revenue increased from approximately HKD 247.6 million in the first half of 2022 to approximately HKD 334.5 million in the first half of 2023, representing a growth of about 35.1%[20]. - Revenue from U.S. customers rose by approximately HKD 87.4 million or 45.0%, from about HKD 194.3 million in the first half of 2022 to about HKD 281.7 million in the first half of 2023[20]. - Sales revenue from Cambodia accounted for 95% of total sales, increasing from HKD 224.2 million in the first half of 2022 to HKD 316.95 million in the first half of 2023[21]. - Gross profit increased from approximately HKD 35.0 million in the first half of 2022 to approximately HKD 62.1 million in the first half of 2023, a growth of about 77.5%[26]. - Gross margin improved from 14.1% in the first half of 2022 to 18.6% in the first half of 2023, an increase of 4.5 percentage points[26]. - Net profit attributable to the company’s owners increased from approximately HKD 7.3 million in the first half of 2022 to approximately HKD 20.9 million in the first half of 2023, a growth of about 185.9%[38]. - Operating profit increased significantly to HKD 25,739,000, compared to HKD 8,704,000 in the previous year, marking a growth of 195%[86]. - Net profit for the period was HKD 20,410,000, a substantial increase of 229% from HKD 6,217,000 in 2022[86]. - Basic and diluted earnings per share for the company owners were HKD 5.1, up from HKD 1.8 in the previous year[86]. Operational Strategy - The company continues to focus on diversifying production risks, with approximately 90% of total production capacity located in Cambodia, which has become a preferred manufacturing base due to its labor cost advantages and stable political environment[10]. - The management believes that the competitive landscape for OEM manufacturers is based on various factors, including product quality, development, and pricing, which positions the company favorably against competitors[11]. - The company is adapting to changing consumer preferences, with a growing demand for sustainable and eco-friendly handbags, presenting strong growth opportunities in the market[15]. - The company recognizes the importance of both online and physical retail channels, as consumer spending on online platforms has increased significantly, while physical stores still play a crucial role in providing product interaction[15]. - The management remains cautious and responsive to market challenges, adjusting operational strategies as necessary to maintain business sustainability[10]. Market Conditions - The company acknowledges the ongoing trade disputes between China and the United States, which may impact market conditions and consumer confidence, particularly in the U.S. market that accounts for over 80% of total revenue[9]. - The company is aware of the potential impact of rising U.S. interest rates and inflation on consumer purchasing power and confidence, which could pose downside risks[9]. - The U.S. Generalized System of Preferences (GSP) program, which allows eligible goods from Cambodia to enter the U.S. duty-free, has not yet been reauthorized, but the company expects Cambodia to remain a key production base due to its competitive advantages[11]. Financial Position - As of September 30, 2023, the group had cash and cash equivalents of approximately HKD 147,500,000, an increase from HKD 103,000,000 as of March 31, 2023[42]. - The current ratio remained stable at 2.6 as of September 30, 2023, consistent with the previous period[42]. - The group employed a total of 4,244 employees as of September 30, 2023, up from 3,477 employees as of March 31, 2023[48]. - Employee costs, including directors' remuneration, were approximately HKD 82,500,000 for the first half of 2023, slightly up from HKD 82,000,000 in the same period of 2022[48]. - The group maintained a net cash position, reflecting a strong financial condition[45]. - Total assets as of September 30, 2023, amounted to HKD 412,378,000, an increase from HKD 382,377,000 as of March 31, 2023[90]. - Total liabilities increased to HKD 151,524,000 from HKD 137,820,000, which is an increase of 9.99%[93]. - The company reported a net profit of HKD 20,907,000 for the six months ended September 30, 2023, compared to a loss in the previous period, demonstrating a turnaround in performance[95]. - Cash and cash equivalents at the end of the period stood at HKD 147,528,000, up from HKD 131,315,000, an increase of 12.34%[96]. Dividends and Shareholder Information - The company declared an interim dividend of HKD 0.02 per share for the first half of 2023, compared to HKD 0.01 per share in the first half of 2022[17]. - The board declared an interim dividend of HKD 0.02 per share and a special dividend of HKD 0.01 per share, totaling approximately HKD 12,259,000[56]. - The company has recognized a total of HKD 12,259,000 in dividends for the six months ended September 30, 2023, compared to HKD 4,086,000 in the same period of 2022, showing an increase of 200%[123]. - The total issued shares as of September 30, 2023, are 408,626,000 shares[64]. - Huaxin Holdings holds 301,138,000 shares, representing approximately 73.70% of the issued shares[67]. - Each of the five directors holds a 20% beneficial interest in Huaxin Holdings, which is a direct shareholder[66]. Inventory and Receivables - Inventory decreased to HKD 84,746,000 from HKD 128,585,000, indicating a reduction of approximately 34%[90]. - Trade receivables increased significantly to HKD 69,619,000 from HKD 36,393,000, reflecting an increase of 91%[90]. - The net trade receivables after impairment provisions stood at HKD 69,619,000 as of September 30, 2023, compared to HKD 36,393,000 as of March 31, 2023, reflecting an increase of 91.3%[137]. - The provision for impairment of trade receivables increased to HKD 5,413,000 as of September 30, 2023, from HKD 2,274,000 as of March 31, 2023, reflecting a rise of 138.5%[140]. Cost Management - The average selling price per unit decreased from HKD 80.8 in the first half of 2022 to HKD 74.1 in the first half of 2023[23]. - Selling and distribution expenses rose from approximately HKD 11.5 million in the first half of 2022 to approximately HKD 13.6 million in the first half of 2023, an increase of about 18.9%[31]. - The cost of goods sold for the six months ended September 30, 2023, was HKD 166,014,000, up from HKD 100,495,000 in 2022[119]. - The cost of inventory recognized as an expense in the income statement for the six months ended September 30, 2023, was HKD 166,014,000, up from HKD 100,495,000 for the same period in 2022, indicating a year-over-year increase of 65.2%[136]. Corporate Governance - All directors confirmed compliance with the standards set forth in the code of conduct for securities trading throughout the first half of 2023[73]. - The directors have agreed to consolidate their interests in Huaxin Holdings and the company, voting unanimously on resolutions at shareholder meetings[64]. - There have been no stock options granted under the stock option plan since its adoption on January 2, 2018[70]. - The company has not issued any stock options or experienced any stock option expirations, grants, exercises, or cancellations in the first half of 2023[70].

香港交易及結算所有限公司及香港聯合交易所有限公司（「聯交所」）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，並明確表示概不就 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。 WAH SUN HANDBAGS INTERNATIONAL HOLDINGS LIMITED 華 新 手 袋 國 際 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：2683） 截 至 二 零 二 三 年 九 月 三 十 日 止 六 個 月 之 中 期 業 績、 股 息 及 暫 停 辦 理 股 份 過 戶 登 記 手 續 華新手袋國際控股有限公司（「本公司」，連同其附屬公司，統稱「本集團」）董事 （「董事」）會（「董事會」）宣佈本集團截至二零二三年九月三十日止六個月（「二零 二三年上半年」）的未經審核簡明綜合中期業績以及截至二零二二 年九月三十 日止六個月（「二零二二年上半年」）的比較數字。 摘要 • 二零二三年上半年收益增加約35.1%至約334,500,000港元（二零二二年上半 年：約247,600,000港元）。 • 二 零 二 三 年 上 半 年 毛 利 ...

Financial Performance - The company's revenue for the fiscal year ended March 31, 2023, decreased by approximately HKD 171 million or 27.7% to about HKD 446.5 million compared to the previous year[18]. - Profit attributable to the company's owners dropped from approximately HKD 39.5 million to about HKD 8.5 million, a decrease of approximately HKD 31 million[18]. - The group's revenue decreased from approximately HKD 617.6 million in 2022 to about HKD 446.5 million in the current year, representing a decline of approximately 27.7%[31]. - Revenue from U.S. customers fell from approximately HKD 494 million to about HKD 347.3 million, a decrease of approximately HKD 146.7 million, primarily due to rising interest and inflation rates affecting purchasing power and consumer confidence[31]. - Gross profit decreased from approximately HKD 127.6 million in 2022 to about HKD 67.6 million in 2023, a decline of approximately 47.1%[38]. - Gross margin fell from approximately 20.7% in 2022 to about 15.1% in 2023, a decrease of about 5.6 percentage points[38]. - Net profit for the year dropped from approximately HKD 39.4 million in 2022 to about HKD 6 million in 2023, a decline of approximately 84.7%[47]. - The company maintained a cash and cash equivalents balance of approximately HKD 103 million as of March 31, 2023, down from HKD 116.5 million in 2022[53]. - The current ratio improved slightly from 2.5 in 2022 to 2.6 in 2023, indicating a stable liquidity position[53]. - The net debt to equity ratio remained at cash net position, reflecting a strong financial condition[56]. Market Conditions - Procurement orders from the United States decreased by approximately HKD 147 million or 30% due to a challenging macroeconomic environment[18]. - The company faces increased pricing competition from Southeast Asian competitors due to disruptions caused by COVID-19 in the previous year[14]. - The overall economic recovery in major global economies is expected to improve market sentiment, although risks remain due to rising U.S. interest and inflation rates[14]. - The U.S. Generalized System of Preferences (GSP) expired on December 31, 2020, impacting import duties on goods from Cambodia[17]. - The UK Development Country Trade Scheme will replace the current Generalized System of Preferences and will take effect in April 2023 for Cambodia, allowing for easier export of goods with mixed origins[75]. Production and Operations - The Cambodian production facilities account for about 90% of the company's total production capacity, enhancing efficiency and profitability[15]. - The company upgraded production facilities and optimized production processes to meet higher demands from existing and new customers[18]. - Sales revenue from products manufactured in Cambodia was HKD 408.996 million (91.6% of total sales), while sales from Dongguan, China, were HKD 37.522 million (8.4%) for the year ending March 31[32]. - Approximately 94% of total revenue for the year came from the group's five largest customers, with the largest single customer accounting for about 30% of total revenue[32]. Strategic Initiatives - The company emphasizes cost optimization as a key strategy to maintain substantial returns despite intensified competition[18]. - The group aims to strengthen its customer base by continuing to develop business with existing clients and seeking new customers to gain greater market share[32]. - The group plans to focus on market developments and opportunities, new revenue sources, and balanced growth to create sustainable returns for shareholders[29]. - The company is considering strategic acquisitions to enhance its market position, with a budget of $100 million earmarked for potential deals[141]. - The company is investing in new technology development, allocating $50 million towards R&D initiatives[141]. Employee and Corporate Governance - The group employed a total of 3,477 employees as of March 31, 2023, down from 4,641 employees as of March 31, 2022[59]. - Employee costs, including director remuneration, were approximately HKD 137.1 million for the year, compared to HKD 158.5 million in the previous year[59]. - The board proposed a final dividend of zero HKD per share for the current year, down from 2.0 HKD cents per share in the previous year, and a special dividend of 1.0 HKD cent per share, also down from 2.0 HKD cents per share[65]. - The board of directors includes both executive and independent non-executive members, with specific terms for rotation and re-election every three years[179]. - All independent non-executive directors have confirmed their independence according to the listing rules, and the company believes they remain independent[184]. Future Outlook - The company provided an optimistic outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[141]. - New product launches are expected to contribute an additional $200 million in revenue over the next year[141]. - Operational efficiency improvements are anticipated to reduce costs by 5% in the upcoming year[141]. - The company aims to increase its market share by 3% through targeted marketing strategies[141]. Economic and Social Context in Cambodia - Cambodia's GDP growth rate from 2017 to 2021 ranged from -3.1% to 7.5%, with a compound annual growth rate of 3.52% during this period[97]. - The construction sector accounts for the largest share of foreign investment, followed by infrastructure, industry (mainly textiles), agriculture, and tourism[88]. - The rise in the middle class in Cambodia is expected to enhance consumer spending and market potential in the future[119]. - The Cambodian economy is projected to recover strongly in 2022 as the government lifts most COVID-19 restrictions, with GDP growth expected to resume[97]. - Despite corruption and rising wages, Cambodia's economy is projected to grow steadily, creating opportunities in the local market[128].

香港交易及結算所有限公司及香港聯合交易所有限公司（「聯交所」）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 會對因本公告全部或任何部分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。 WAH SUN HANDBAGS INTERNATIONAL HOLDINGS LIMITED 華 新 手 袋 國 際 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：2683） 截 至 二 零 二 三 年 三 月 三 十 一 日 止 年 度 之 末 期 業 績 華新手袋國際控股有限公司（「本公司」，連同其附屬公司，統稱「本集團」）董事 會（分別為「董事會」及「董事」）謹此宣佈本集團截至二零二三年三月三十一日止 年度（「本年度」）的經審核綜合業績以及截至二零二二年三月三十一日止年度 （「二零二二年度」）的比較數字。 摘要 • 本年度收益減少約27.7%至約446,500,000港元（二零二二年度：約617,600,000 港元）； • 本年度毛利減少約47.1%至約67,600,000港元（二零二二年度：約127,600,000港 元）； • 本年度毛利率減少約5 ...

Financial Performance - For the six months ended September 30, 2022, the company's revenue decreased by approximately HKD 68.9 million or 21.8% to HKD 247.6 million compared to the same period in 2021[12]. - The profit attributable to owners of the company decreased from approximately HKD 17.8 million in the first half of 2021 to approximately HKD 7.3 million, a reduction of about HKD 10.5 million[12]. - The company's revenue decreased from approximately HKD 316.4 million in the first half of 2021 to approximately HKD 247.6 million in the first half of 2022, a decline of about 21.8%[19]. - Revenue from U.S. customers fell by approximately HKD 60.4 million or 23.7%, from approximately HKD 254.6 million in the first half of 2021 to approximately HKD 194.3 million in the first half of 2022, primarily due to rising interest and inflation rates affecting purchasing power and consumer confidence[19]. - Gross profit decreased from approximately HKD 62.3 million in the first half of 2021 to approximately HKD 35 million in the first half of 2022, a decline of about 43.8%, with gross margin dropping from 19.7% to 14.1%[27]. - Operating profit decreased to HKD 8,704,000, a decline of 62.3% from HKD 23,084,000 in the prior year[104]. - Net profit for the period was HKD 6,217,000, a decrease of 64.9% compared to HKD 17,773,000 in the same period last year[104]. - Basic and diluted earnings per share were HKD 1.8, down from HKD 4.3 in the previous year[104]. - The company's profit for the six months ended September 30, 2022, was HKD 6,217,000, a decrease of 65% compared to HKD 17,773,000 in the same period of 2021[106]. - Total comprehensive income for the period was HKD 6,098,000, down from HKD 17,795,000 year-on-year[106]. Operational Strategies - The company continues to focus on sustainable operations and internal controls to mitigate production risks in a volatile business environment[11]. - The company is adapting its business strategies swiftly in response to market changes and competitive pressures from Southeast Asian manufacturers[11]. - The company emphasizes the importance of diversifying production risks amid increasing global competition and cooperation complexities[11]. - The management remains cautious and is adjusting operational strategies to navigate the challenges posed by the ongoing COVID-19 pandemic and its impact on logistics and inventory pressures[10]. - The company plans to strengthen its customer base by developing existing business relationships and seeking new customers in different markets[20]. - The company plans to continue focusing on product development and market expansion strategies to enhance future performance[119]. Production and Manufacturing - Approximately 90% of the company's total production capacity is now based in Cambodia, which has become a preferred manufacturing base due to its labor cost advantages and stable political situation[11]. - The sales revenue from products manufactured in Cambodia was approximately HKD 224.2 million, accounting for 91% of total sales, while sales from Dongguan, China, were approximately HKD 23.4 million, accounting for 9%[20]. - The company has leased another factory in Dongguan to support its existing and future business development plans, with the relocation of operations from the old factory completed in August 2022[55]. Financial Position - As of September 30, 2022, the group had cash and cash equivalents of approximately HKD 131,300,000, an increase from approximately HKD 116,500,000 as of March 31, 2022[42]. - The current ratio as of September 30, 2022, was 2.4, slightly down from 2.5 as of March 31, 2022, indicating stable liquidity[43]. - The group maintained a net cash position and a robust current ratio, reflecting a strong financial condition[46]. - The total assets as of September 30, 2022, were HKD 411,501,000, a slight decrease from HKD 416,991,000 as of March 31, 2022[109]. - Cash and cash equivalents increased to HKD 131,315,000 from HKD 116,547,000, reflecting a positive cash flow trend[116]. - Operating cash flow for the six months ended September 30, 2022, was HKD 25,131,000, a significant improvement from a cash outflow of HKD 18,284,000 in the previous year[116]. - The company has a total of 301,138,000 shares held by major shareholders, representing approximately 73.70% of the issued shares as of September 30, 2022[78]. - The total issued shares of the company as of September 30, 2022, are 408,626,000[90]. Shareholder Information - The major shareholders include Mr. Ma Qingwen, Mr. Ma Qingming, Ms. Ma Lanzhu, Mr. Ma Renzhi, and Ms. Ma Lanxiang, each holding 20% of the equity in Huaxin Holdings[76]. - The equity percentage of Huaxin Holdings in the company is 73.70%, indicating a significant level of control[86]. - The shareholders' agreement includes provisions for the integration of interests and management control over both Huaxin Holdings and the company[76]. Dividends and Returns - The company declared an interim dividend of HKD 0.01 per share for the first half of 2022, down from HKD 0.015 per share in the first half of 2021, with no special dividend declared[18]. - The interim dividend declared was HKD 0.01 per share, compared to HKD 0.015 per share in the previous year, representing a decrease of 33.3%[149]. Risks and Challenges - The company is facing increased downward risks due to rising interest and inflation rates in the U.S., which may affect consumer purchasing power and confidence[10]. - The U.S. Generalized System of Preferences (GSP) program, which allowed eligible goods from Cambodia to enter the U.S. duty-free, has not yet been reauthorized by Congress, creating uncertainty for future imports[11]. - The company recognizes the competitive pricing pressures from Southeast Asian competitors, which have intensified due to disruptions caused by COVID-19 in the previous fiscal year[10]. - The company faced various financial risks, including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since the end of the last fiscal year[129]. Asset Management - The company has reclassified its industrial property in China as investment property as of September 30, 2022, reflecting a strategic realignment of its asset portfolio[163]. - The fair value of financial assets measured at fair value through profit or loss increased to HKD 1,350,000 as of September 30, 2022, from HKD 1,330,000 as of March 31, 2022, showing a slight increase of 1.5%[166]. - The company’s inventory levels showed a decrease in raw materials to HKD 54,615,000 as of September 30, 2022, down from HKD 63,350,000 as of March 31, 2022, indicating a reduction of approximately 13.7%[168]. Miscellaneous - The company has not repurchased any of its listed securities during the first half of 2022[91]. - There were no conflicts of interest reported by directors or controlling shareholders in competing businesses during the first half of 2022[93]. - The company did not experience significant impacts from the adoption of new accounting standards effective from April 1, 2022[122].

COVID-19 Impact and Response - The company reported a significant impact from the COVID-19 pandemic, leading to a temporary suspension of operations in Cambodia from May 15 to May 28, 2021, due to confirmed COVID-19 cases among employees[21]. - The company has implemented remote work policies in Hong Kong from early February to early April 2022 to ensure employee safety amid rising COVID-19 cases[21]. - The company’s main production facility in Cambodia reopened on May 31, 2021, after thorough cleaning and review of preventive measures[21]. - The company noted that most employees have been vaccinated as of the date of the annual report[21]. - The company is focused on enhancing health and safety measures for employees and their families during the pandemic[21]. Financial Performance - The company's revenue increased by approximately HKD 213.7 million or 52.9% to about HKD 617.6 million for the year[25]. - Profit attributable to owners rose from approximately HKD 5.6 million to about HKD 39.5 million, an increase of approximately HKD 34 million[25]. - Revenue from U.S. customers increased by approximately HKD 191.2 million to about HKD 494 million, driven by market recovery and improved consumer spending[35]. - Sales revenue from Cambodia accounted for 93.1% of total sales, while Dongguan, China contributed 6.9%[36]. - The average selling price per item increased from HKD 60.7 to HKD 75.5, reflecting the complexity of products sold[38]. - The company's sales cost rose by approximately 45.5% to about HKD 490 million, with strict cost control measures implemented[40]. - Gross profit increased by approximately 89.9% to about HKD 127.6 million, with gross margin rising from 16.6% to 20.7%[41]. - The group's net profit for the year increased by approximately HKD 33,800,000 or 608.1% to approximately HKD 39,400,000, with a profit margin rising from 1.4% to 6.4%[50]. Expenses and Costs - Sales and distribution expenses rose from approximately HKD 21,700,000 to approximately HKD 27,500,000, an increase of about 26.5%, primarily due to higher transportation and customs costs[43]. - Administrative expenses increased from approximately HKD 34,700,000 to approximately HKD 44,500,000, reflecting a rise of about 28.3% as the company resumed normal operations after temporary cost control measures in the previous year[44]. - The group's financing costs net increased by approximately HKD 200,000 or 7.8% to approximately HKD 2,100,000, mainly due to a decrease in financing income[48]. - Income tax expenses surged from HKD 3,600,000 to approximately HKD 13,000,000, an increase of about 255.0%, attributed to higher taxable profits[49]. Corporate Governance - The company has a strong governance structure with experienced board members from various sectors, including law and finance[146][149][151]. - The company emphasizes the importance of independent oversight in its operations and decision-making processes[153]. - The board includes members with extensive experience in accounting, finance, and auditing, enhancing the company's financial oversight capabilities[153]. - The company is committed to maintaining high standards of corporate governance through its independent directors[145][149]. Market and Economic Context - The company anticipates that Cambodia will remain a preferred production base due to its relatively low labor costs and stable political situation compared to other Southeast Asian countries[24]. - The company highlighted the ongoing trade disputes between China and the U.S. as a potential downside risk for operations[22]. - The EU has revoked some tariff preferences for Cambodia, impacting higher value-added products, while the US GSP program expired on December 31, 2020, leading to normal tariffs on goods[137]. - The Cambodian government announced a full reopening of all sectors in November 2021, following the control of the COVID-19 outbreak[82]. Employee and Operational Insights - The group employed a total of 4,641 employees as of March 31, 2022, compared to 3,826 employees as of March 31, 2021[63]. - Employee costs, including directors' remuneration, amounted to approximately HKD 158.5 million for the year, up from approximately HKD 101.6 million in the previous year[63]. - The company has over 33 years of experience in manufacturing and trade, with key executives overseeing production and quality control[144]. - The company actively engages in professional development and governance practices to enhance its operational effectiveness[153]. Future Plans and Investments - The company plans to relocate its Dongguan factory to a new site, with the aim of generating rental income post-relocation[28]. - The company plans to continue utilizing the remaining net proceeds according to the reallocation purposes and proportions, while evaluating business objectives[181]. - Approximately HKD 25.6 million (30.0%) was allocated for expanding production facilities in Cambodia, including construction of factory buildings and purchasing production equipment[180]. - The company has not experienced any major changes in its operational strategy or market expansion plans during the reporting period[64].

Stock Code: 2683 2021/22 Interim Report 中期報告 2021/22 Interim Report | --- | --- | |----------------------------------------------------|------------------| | | | | | | | （於開曼群島註冊成立的有限公司） 股份代號 : 2683 | | | | | | | | | | 2021/22 中期報告 | 目錄 2 | --- | |--------------------------| | | | 公司資料 | | 管理層討論及分析 | | 企業管治及其他資料 | | 簡明綜合財務報表審閱報告 | | 簡明綜合收益表 | | 簡明綜合全面收益表 | | 簡明綜合財務狀況表 | | 簡明綜合權益變動表 | | 簡明綜合現金流量表 | | 簡明綜合中期財務資料附註 | 4 14 19 20 21 22 24 25 26 林國昌先生 楊志偉先生 公司資料 | --- | --- | |-------------------------|---------- ...

2020/21 年報 （於開曼群島註冊成立的有限公司） 股份代號 : 2683 | --- | --- | --- | |----------------------------------------------------------------------------------------------------------|-------|-------------------| | | | | | 公司資料 主席報告 | | 2 4 | | 管理層討論及分析 | | 13 | | 柬埔寨國家整體概覽 | | 19 | | 董事及高級管理層履歷 | | 31 36 | | 董事會報告 企業管治報告 獨立核數師報告 綜合收益表 綜合全面收益表 綜合財務狀況表 綜合權益變動表 | | 51 67 73 74 75 77 | | 綜合現金流量表 綜合財務報表附註 五年財務概要 | | 78 79 131 | | | | | | | | | | | | | | | | | 公司資料 董事會 執行董事 馬慶文先生（主席） 馬慶明先生（行政總裁） 馬蘭珠女士 馬任子先生 馬蘭香女士 獨立非執行董事 林國昌先生 ...

2020/21 中期報告 （於開曼群島註冊成立的有限公司） 股份代號 : 2683 | --- | --- | --- | --- | |-------------------------------------------------------------------------------------------------------------------------------|-------|-------|-------------------| | | | | | | | | | | | 目錄 公司資料 | | | 2 | | 管理層討論及分析 | | | 4 | | 企業管治及其他資料 | | | 12 | | | | | | | 簡明綜合財務報表審閱報告 | | | 17 | | 簡明綜合收益表 簡明綜合全面收益表 簡明綜合財務狀況表 簡明綜合權益變動表 簡明綜合現金流量表 簡明綜合中期財務資料附註 | | | 18 19 20 22 23 24 | | | | | | | | | | | | | | | | | | | | | 公司資料 | --- | --- | |--------- ...