Financial Performance - Revenue for the year 2021 was HKD 18,676 million, an increase from HKD 16,512 million in 2020, representing a growth of 13.1%[14] - Gross profit for 2021 was HKD 6,596 million, with a gross margin of 35.3%, down from 37.7% in 2020[14] - Operating profit decreased to HKD 2,043 million in 2021, with an operating margin of 10.9%, compared to 14.9% in 2020[14] - EBITDA for 2021 was HKD 3,292 million, with an EBITDA margin of 17.6%, down from 21.8% in the previous year[14] - Basic earnings per share for 2021 were HKD 1.365, a decrease from HKD 1.565 in 2020[14] - Net profit decreased by 12.6% to HKD 1,638 million, resulting in a net profit margin of 8.8%[39] - Total revenue for the year increased by 13.1% to HKD 18,676 million[25] - Total revenue for the year ended December 31, 2021, was HKD 18,675,739,458, an increase from HKD 16,511,676,772 in 2020, representing a growth of approximately 13.1%[187] - Profit attributable to equity holders of the company was HKD 1,638,364,572, down from HKD 1,874,329,244 in 2020, a decrease of approximately 12.6%[187] Dividends - The company declared a total dividend of HKD 0.50 per share for 2021, up from HKD 0.47 per share in 2020[14] - The board proposed a final dividend of HKD 0.40 per share, bringing the total dividend for the year to HKD 0.50 per share[39] - The proposed final dividend is HKD 0.40 per share, totaling HKD 480,506,149, subject to shareholder approval[60] - The board proposed a final dividend of HKD 0.40 per share for the year ended December 31, 2021, totaling HKD 480,506,149, an increase from HKD 0.37 per share in 2020[132] Market and Product Strategy - The company is focusing on high-end product diversification and expanding into personal care markets to capture new consumer trends[19] - The company aims to enhance market penetration through collaboration with major e-commerce platforms[25] - The company is focusing on the elderly care product market, anticipating it to become a new profit growth point[28] - The high-end female hygiene product "Libresse" is gaining market share, particularly in mainland China[27] - The company continues to expand its Southeast Asia business through its R&D and production base in Malaysia[25] - The online sales strategy includes entering new platforms like Douyin and Kuaishou to capture emerging consumer trends[25] - The company plans to expand its paper production capacity to 1,390,000 tons by the end of the year, enhancing high-end consumer paper production[30] - The group aims to expand its market share in personal care business in mainland China and Southeast Asia[56] Operational Efficiency - The inventory turnover period increased to 55 days in 2021, compared to 49 days in 2020[14] - The current ratio improved to 1.3 in 2021, up from 1.1 in 2020[14] - The net debt to EBITDA ratio remained stable at 1.2 times for both years[14] - The company received a HKD 300 million sustainable development performance-linked loan, recognizing its achievements in environmental, social, and governance (ESG) performance[32] - The establishment of a regional headquarters in Malaysia is expected to enhance operational efficiency and support long-term development in emerging markets[31] Sustainability and Environmental Initiatives - The sustainable development blueprint covers eight areas, including energy management and green supply chain[25] - The company has established a five-year sustainable development roadmap covering eight major areas, including energy management and carbon emissions[120] - The energy efficiency for the year 2021 was reported at 0.21 tons of standard coal consumed per HKD 10,000 in sales[120] - The group’s total carbon emissions amounted to 1,220,493 tons, with a carbon emission intensity of 0.65 tons per HKD 10,000 in sales[53] - The management team emphasized the importance of sustainability initiatives, aiming for a 30% reduction in carbon emissions by 2025[65] - The company emphasizes compliance with environmental laws and regulations, alongside other significant legal requirements[121] Governance and Management - The board of directors consists of 12 members, ensuring a diverse range of expertise and governance oversight[79] - The company has adhered to high standards of corporate governance, complying with all relevant regulations and guidelines[78] - The management team includes experienced professionals with extensive backgrounds in production, finance, and marketing, enhancing the company's strategic capabilities[75] - The company has implemented a comprehensive internal control system to maintain operational efficiency and compliance[80] - The board meets regularly, approximately quarterly, to review strategies and ensure alignment with shareholder interests[80] - The company is committed to transparency and accountability to its shareholders, reinforcing its governance framework[78] Financial Position - Total assets increased to HKD 24,180,971,290 in 2021, up from HKD 23,121,601,600 in 2020, representing a growth of approximately 4.6%[183] - Total equity increased to HKD 13,018,661,883 in 2021, up from HKD 11,667,357,034 in 2020, indicating a growth of approximately 11.6%[183] - Total liabilities decreased to HKD 11,162,309,407 in 2021 from HKD 11,454,244,566 in 2020, representing a reduction of about 2.5%[184] - Cash and cash equivalents increased significantly to HKD 1,025,327,689 in 2021 from HKD 749,399,329 in 2020, marking a growth of approximately 37%[183] - The company reported a significant increase in other reserves to HKD 8,439,573,727 in 2021 from HKD 7,119,034,916 in 2020, representing a growth of approximately 18.5%[183] Related Party Transactions - The company has established a continuous related party transaction framework with Essity Group and Asaleo Care, which will be monitored for compliance with listing rules[142] - The independent non-executive directors confirmed that the ongoing related party transactions were conducted in the ordinary course of business and on fair terms[144] - The company’s auditor issued an unqualified opinion regarding the ongoing related party transactions disclosed in the annual report[145] - Total transactions under the Asaleo Care product supply agreement amounted to HKD 42,969,803 against an annual cap of HKD 100,000,000, representing 42.97% of the cap[144] - Transactions under the Vinda procurement master agreement totaled HKD 185,128,598, which is 74.05% of the annual limit of HKD 250,000,000[144] - The Essity procurement master agreement had transactions amounting to HKD 166,242,833, accounting for 55.41% of the annual cap of HKD 300,000,000[144] Risk Management - The company is exposed to various financial risks, including market risks related to foreign exchange and interest rates[124] - The company’s risk management plan focuses on minimizing potential adverse impacts on financial performance due to market unpredictability, managed by a central finance department[127] - The risk register records potential risks and mitigation actions, which are monitored closely as part of daily operations[110] - The Risk Management Committee is responsible for advising on significant decisions affecting the group's risk profile[100] Audit and Compliance - The Audit Committee reviewed the effectiveness of internal controls and risk assessment processes during the year[98] - The internal audit department reports quarterly to the audit committee, assessing the effectiveness of the internal control system and addressing any identified deficiencies[110] - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, reflecting the best estimates and judgments of the board and management[107] - The company confirmed no significant uncertainties affecting its ability to continue as a going concern as of December 31, 2021[107]

Revenue and Profitability - The total revenue for the first half of 2021 increased by 19.0% to HKD 9,085 million, with a fixed exchange rate growth of 11.0%[20] - The tissue segment accounted for 83% of total revenue, while personal care contributed 17%[20] - E-commerce channel revenue grew by 26%, reflecting a shift in consumer habits accelerated by the pandemic[20] - Gross profit increased by 15.4% to HKD 3,394 million, maintaining a gross margin of 37.4%[20] - The net profit margin for the first half of 2021 was 10.6%, compared to 12.0% in the same period of 2020[14] - Net profit increased by 6.0% to HKD 967 million, with a net profit margin of 10.6%, down by 1.4 percentage points[21] - Tissue segment revenue grew by 20.3% to HKD 7,509 million, accounting for 83% of total revenue, with a gross margin of 37.8%[22] - Personal care segment revenue rose by 13.3% to HKD 1,576 million, representing 17% of total revenue, with a gross margin of 35.3%[23] - The company reported a profit of HKD 967,192,585 for the six months ended June 30, 2021, compared to HKD 912,793,887 for the same period in 2020, reflecting an increase of approximately 6%[68] Financial Position - The company maintained a current ratio of 1.26, up from 1.01 in the previous year[14] - The debt ratio increased to 42.7% from 41.3% year-on-year[14] - The company reported a cash balance of HKD 781,821,618 as of June 30, 2021, compared to HKD 749,399,329 on December 31, 2020[31] - Total short-term and long-term loans amounted to HKD 5,058,988,434 as of June 30, 2021, up from HKD 4,731,890,823 on December 31, 2020[31] - The net debt ratio was 36.4% as of June 30, 2021, slightly up from 35.9% on December 31, 2020[31] - The company maintained a net debt ratio of 36.4% and a reduced effective tax rate of 16.6%, down by 6.2 percentage points[21] - The total assets as of June 30, 2021, amounted to HKD 23,993,401,955, an increase from HKD 23,121,601,600 at the end of 2020, representing a growth of about 3.77%[64] - Total liabilities amounted to HKD 11,727,899,872, up from HKD 11,454,244,566, indicating a rise of about 2.39%[64] Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.10 per share, unchanged from the previous year[14] - The company declared an interim dividend of HKD 0.10 per share, totaling approximately HKD 120,081,537 based on 1,200,815,373 shares outstanding[33] - The interim dividend declared on July 15, 2021, was HKD 0.10 per share, consistent with the previous year, with a total payout of HKD 120,081,537 based on 1,200,815,373 shares[113] Operational Efficiency and Investments - The company prepared for potential international logistics disruptions by increasing raw material inventory levels in 2020[20] - The company plans to expand production capacity in Southern, Eastern, and Central China, with completion expected in 2021[25] - The company plans to continue investing in and expanding its personal care business in mainland China[29] - The company aims to enhance brand competitiveness and profitability through product innovation and optimization of its product portfolio[29] - The company is committed to improving operational efficiency and investment returns while maintaining ample operating cash flow[29] Employee and Training Initiatives - The company provided 123,897 training hours to 10,428 employees during the period[26] - The company aims for a "zero accident" goal in occupational health and safety, with 10 reported loss time incidents in the first half of 2021[156] Market Position and Strategy - The company’s market share in the mainland China tissue market reached 19.0% in Q2 2021[22] - The company is focusing on e-commerce sales growth and expanding market share in all operating locations[29] - The demand for high-quality hygiene and personal care products is increasing, providing significant business opportunities in the post-pandemic era[158] Shareholder Structure and Governance - As of June 30, 2021, Essity Aktiebolag (publ) had a total of 702,342,489 shares, with 61,734,372 being Class A shares and 640,608,117 being Class B shares[40] - Essity Group Holding BV holds 620,737,112 shares, representing approximately 51.69% of the issued share capital[48] - Fortis International Limited owns 261,341,581 shares, accounting for about 21.76% of the issued share capital[48] - Invesco Hong Kong Limited holds 60,734,000 shares, which is approximately 5.06% of the issued share capital[48] - The audit committee consists of four members, including three independent non-executive directors, responsible for reviewing financial reporting procedures[52] - The remuneration committee is tasked with formulating the group's remuneration policy and determining specific remuneration for senior management[53] - The risk management committee assists the board in determining the group's risk levels and reviewing identified major risks[55] - The executive committee is responsible for formulating the annual budget and major business plans[56] - The strategy development committee proposes strategies for the group's long-term positioning and investment decisions[57] Financial Performance Metrics - The company reported a net operating profit of HKD 1,210,563,799, slightly down from HKD 1,256,762,452 in the previous year, reflecting a decrease of approximately 3.67%[66] - The total comprehensive income for the six months ended June 30, 2021, was HKD 1,025,936,437, compared to HKD 671,557,959 for the same period in 2020, representing an increase of approximately 52.7%[68] - The net cash flow from operating activities for the six months ended June 30, 2021, was HKD 1,013,518,611, down from HKD 1,141,805,215 in 2020, indicating a decrease of about 11.2%[70] - The company incurred net cash outflows from investing activities of HKD 822,037,070 for the six months ended June 30, 2021, compared to HKD 534,414,569 in 2020, representing an increase of about 54%[70] - The company raised HKD 3,137,755,676 from borrowings during the six months ended June 30, 2021, compared to HKD 1,832,310,432 in the same period of 2020, reflecting an increase of approximately 71.2%[70]

Financial Performance - Revenue for 2020 was HKD 16,512 million, an increase from HKD 16,074 million in 2019, representing a growth of 2.7%[10] - Gross profit for 2020 reached HKD 6,223 million, up from HKD 4,985 million in 2019, resulting in a gross margin of 37.7% compared to 31.0% in the previous year[10] - Operating profit increased to HKD 2,453 million in 2020, a significant rise from HKD 1,570 million in 2019, with an operating margin of 14.9%[10] - The company reported a basic earnings per share of HKD 1.565, compared to HKD 0.953 in 2019, reflecting a growth of 64.3%[10] - Net profit surged by 64.7% to HKD 1,874 million, with a net profit margin increase of 4.3 percentage points[35] - Total revenue increased by 2.7% to HKD 16,512 million, with a fixed exchange rate growth of 3.7%[32] - Gross profit rose by 24.8% to HKD 6,223 million, with a gross margin improvement of 6.7 percentage points to 37.7%[34] - EBITDA increased by 34.5% to HKD 3,601 million, reflecting an EBITDA margin rise of 5.1 percentage points to 21.8%[34] - The company reported a total of HKD 1.2 billion for the fiscal year 2020, representing a year-on-year growth of 15%[70] - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12% driven by new product launches and market expansion initiatives[72] Market and Product Development - The company plans to continue expanding its market presence and investing in new product development to enhance competitiveness in the hygiene products sector[15] - The demand for personal hygiene products, including wet wipes and kitchen paper, significantly increased due to heightened public awareness during the pandemic[21] - The company launched new products including scented tissue packs and a mini wet wipe series, responding to increased hygiene product demand due to the pandemic[37] - The adult incontinence care product market in mainland China is expected to grow rapidly, with the population aged 65 and above projected to rise from 13% in 2019 to 28% by 2050[19] - The high-end female hygiene product market is growing at a rate significantly higher than the overall market, providing opportunities for the company's growth in this segment[26] - The company plans to focus on product innovation, optimize product mix, and enhance brand competitiveness and profitability[49] Financial Health and Ratios - The net debt to EBITDA ratio improved to 1.2 times in 2020 from 1.4 times in 2019, indicating better financial health[10] - The company maintained a current ratio of 1.1, consistent with the previous year, indicating stable liquidity[10] - As of December 31, 2020, the net debt ratio was 35.9%, down from 41.0% on December 31, 2019[52] - The company aims to maintain a strong financial position with a net debt ratio calculated as net debt divided by total equity[49] - The company has bank and cash balances of HKD 749,399,329, with total short-term and long-term loans amounting to HKD 4,731,890,823[51] Corporate Governance - The board consists of 12 members, including 4 executive directors, 4 non-executive directors, and 4 independent non-executive directors[77] - The company has adopted a code of conduct for directors' securities trading that exceeds the standards set by the listing rules[76] - The independent non-executive directors ensure effective corporate governance and provide sufficient checks and balances to protect the interests of the company and its shareholders[83] - The company has complied with all provisions of the corporate governance code as of December 31, 2020[75] - The board is responsible for the overall strategy and policy of the group, ensuring adequate funding and management resources for implementation[78] Sustainability and Social Responsibility - The company is committed to sustainability, having received recognition for its green financing initiatives, including a green loan certification from the Hong Kong Quality Assurance Agency[27] - The company is committed to fulfilling its corporate social responsibility by ensuring stable market supply during the pandemic[18] - The company achieved 100% certification of purchased wood pulp through forest management systems (FSCTM/PEFC/CFCC) in 2020[122] - The management team emphasized the importance of sustainability, with a goal to reduce operational costs by 15% through eco-friendly practices[70] Shareholder Information - The board proposed a final dividend of HKD 0.37 per share, totaling HKD 0.47 per share for the year, compared to HKD 0.28 per share in the previous year[35] - The company’s available reserves for distribution to shareholders as of December 31, 2020, amounted to HKD 4,891,520,707, an increase from HKD 4,611,246,619 in 2019[131] - The dividend policy aims to distribute at least 25% of the distributable profits to shareholders while retaining sufficient reserves for future development[133] - The board will consider various factors before declaring dividends, including operational performance, cash flow, and future prospects[134] Risk Management - The company’s financial activities are subject to various risks, including market risk, credit risk, and liquidity risk, which are actively managed by a central finance department[129] - The Risk Management Committee was established on November 8, 2013, to oversee risk management processes and ensure appropriate risk mitigation actions are in place[110] - The board conducted an annual review of the effectiveness of the risk management and internal control systems, concluding they are adequate and effective[111] Audit and Compliance - The company confirmed that the financial statements were prepared in accordance with the Hong Kong Financial Reporting Standards and reflect the best estimates and judgments of the board and management[107] - The audit committee oversees the financial reporting process of the group[185] - The company’s auditor, PwC, received an audit fee of HKD 8,331,000 and a non-audit fee of HKD 2,856,000 for the year[113]

Financial Performance - Revenue growth rate for the first half of 2020 was -3.3%, compared to 7.6% in 2019[15] - Gross profit margin increased to 38.5% from 28.1% year-on-year[15] - EBITDA margin improved to 23.8% from 14.9% in the previous year[15] - Net profit margin rose to 12.0%, up from 5.6% in 2019[15] - Basic earnings per share increased to HKD 0.763 from HKD 0.368[15] - Total revenue for the first half of 2020 was HKD 7,634 million, reflecting a natural growth of 0.9% and a decline of 3.3% in HKD terms[27] - Gross profit increased by 32.6% to HKD 2,941 million, with a gross profit margin rising by 10.4 percentage points to 38.5%[27] - Net profit surged by 107.5% to HKD 913 million, with a net profit margin expanding by 6.4 percentage points to 12.0%[28] - Basic earnings per share for the period was HKD 0.763, compared to HKD 0.368 in the same period last year, reflecting a growth of 106.2%[77] - The company's profit attributable to equity holders for the six months ended June 30, 2020, was HKD 912,793,887, a significant increase from HKD 439,861,255 in the same period of 2019, representing a growth of 107.5%[123] Dividends and Shareholder Returns - Interim dividend declared at HKD 0.10, compared to HKD 0.07 in the previous year[15] - The mid-term dividend was declared at HKD 0.10 per share, totaling approximately HKD 119.7 million based on 1,197,497,373 shares outstanding[43] - The interim dividend declared on July 16, 2020, was HKD 0.10 per share, an increase from HKD 0.07 per share in 2019, with total interim dividends amounting to HKD 119,749,737 based on 1,197,497,373 shares[125] Operational Efficiency - Inventory turnover period increased to 48 days from 46 days year-on-year[15] - Accounts receivable turnover period was 43 days, slightly up from 42 days in 2019[15] - The company plans to focus on product innovation and optimizing its product mix to enhance brand competitiveness and profitability[39] - The company aims to improve operational efficiency and cost management as part of its overall strategy to enhance profitability[143] Debt and Financial Stability - Debt ratio decreased to 41.3% from 55.3% year-on-year[15] - Net debt ratio improved to 32.5% from 49.9% in the previous year[15] - The net debt ratio decreased by 8.5 percentage points to 32.5% compared to the end of 2019[28] - The net debt ratio decreased to 33% as of June 30, 2020, down from 41% at the end of 2019, indicating improved financial stability[41] - The company has no significant contingent liabilities or asset pledges as of June 30, 2020, indicating a strong financial position[42] - The company reported cash and bank balances of HKD 876.1 million as of June 30, 2020, compared to HKD 460.4 million at the end of 2019[41] - Total short-term and long-term loans amounted to HKD 3,926,135,373, down from HKD 4,156,187,795 as of December 31, 2019, with 66.2% being long-term loans[182] Market Segments and Growth - The tissue division generated revenue of approximately HKD 6,243 million, accounting for 82% of total revenue, with a gross margin of 39.4%[29] - The personal care division's revenue reached HKD 1,391 million, representing a growth of 3.7%, and accounted for 18% of total revenue[30] - The company anticipates continued growth in the high-end paper products segment, driven by increasing consumer hygiene awareness and demand for wet wipes[38] - The personal care market is expected to grow, particularly in incontinence products, due to aging population and heightened awareness from the pandemic[38] - The company plans to expand wet wipes production capacity in South and East China, expected to be completed in 2021[173] Corporate Governance and Compliance - The company adhered to all corporate governance codes as per the Hong Kong Stock Exchange listing rules[45] - The Audit Committee consists of three members, including two independent non-executive directors, responsible for reviewing financial reporting procedures[62] - The Remuneration Committee is tasked with determining the remuneration policy for the group and specific compensation for executive directors and senior management[63] - The company is committed to adhering to the standards set forth in the Hong Kong Listing Rules and relevant accounting standards[70] Employee Engagement and Training - The company conducted 382,616 hours of training in mainland China, with a total of 19,611 participants during the period[34] - The company aims for a "zero accident" goal in occupational health and safety, with a total of 1,338 seminars held in mainland China[35] - As of June 30, 2020, the company employed 11,247 employees, an increase from 10,941 employees on June 30, 2019[175] Related Party Transactions - Total sales to related parties for the six months ended June 30, 2020, amounted to HKD 88,380,873, slightly down from HKD 90,281,606 in the same period of 2019[130] - Total purchases from related parties for the six months ended June 30, 2020, were HKD 77,462,970, compared to HKD 97,737,341 in the same period of 2019[131] - Accounts receivable from related parties amounted to HKD 14,808,198 from Uni-Charm as of June 30, 2020, up from HKD 10,940,760 at the end of 2019, representing a growth of 35.5%[139] Strategic Outlook - The company is focusing on expanding its market presence and enhancing product offerings to drive future growth[143] - The management discussed ongoing research and development efforts aimed at introducing new products and technologies in the upcoming quarters[143] - Future performance guidance indicates a positive outlook, with expectations of continued revenue growth driven by market expansion strategies[143]

Financial Performance - The company's revenue for 2019 was HKD 16,074 million, an increase of 8% from HKD 14,879 million in 2018[16] - Gross profit for 2019 reached HKD 4,985 million, up from HKD 4,187 million in 2018, resulting in a gross margin of 31.0% compared to 28.1% in the previous year[16] - Operating profit increased to HKD 1,570 million in 2019, representing an operating margin of 9.8%, up from 6.9% in 2018[16] - The company reported a basic earnings per share of HKD 0.953, compared to HKD 0.544 in 2018, reflecting a significant increase[16] - The net debt to EBITDA ratio improved to 1.4 times from 2.4 times in the previous year, indicating better financial health[16] - The company’s current ratio improved to 1.1 from 1.0, suggesting enhanced liquidity[16] - The company declared a total dividend of HKD 0.280 per share for 2019, an increase from HKD 0.200 per share in 2018[16] - Free cash flow reached HKD 1,453 million, contributing to a stronger balance sheet with net debt to EBITDA ratio decreasing to 1.4%[26] - Total revenue increased by 8.0% to HKD 16,074 million, with a growth of 11.6% at constant exchange rates[34] - Gross profit rose by 19.1% to HKD 4,985 million, with a gross margin increase of 2.9 percentage points to 31.0%[34] - EBITDA grew by 36.5% to HKD 2,678 million, with an EBITDA margin improvement of 3.5 percentage points to 16.7%[34] - Operating profit increased by 53.9% to HKD 1,570 million, with an operating profit margin up by 2.9 percentage points to 9.8%[35] Market Segments - The proportion of revenue from tissue products was 82% in 2019, up from 81% in 2018, indicating stable demand in this segment[18] - The e-commerce customer segment accounted for 31% of total revenue in 2019, compared to 29% in 2018, highlighting growth in online sales channels[18] - In 2019, the company achieved a natural revenue growth of 11.6%, driven by strong performance in the tissue business across Southeast Asia and North Asia, as well as improvements in personal care operations in mainland China[24] - Personal care segment revenue rose by 1.9% to HKD 2,820 million, accounting for 18% of total revenue[41] - Tissue segment revenue increased by 9.4% to HKD 13,254 million, representing 82% of total revenue[37] Production and Capacity - The company added 60,000 tons of production capacity in Hubei, bringing total design capacity to 1,250,000 tons[43] - The company is expanding production capacity in Malaysia and integrating existing facilities to enhance operational efficiency[27] - The company plans to increase local production capacity for female and incontinence care products to reduce production costs and support further development in personal care[22] Sustainability and Environmental Impact - Over 99% of wood pulp procurement is certified or sourced responsibly, highlighting the company's commitment to sustainability[28] - The average comprehensive energy consumption per ton of paper in China is 0.33 tons of standard coal, significantly below the national standard limit of 0.42[46] - Vinda's total carbon dioxide emissions in 2019 amounted to 1,099,670 tons, with an emission density of 0.52 tons per square meter[65] - The company has implemented a smart energy management system (EMS) in some factories to monitor energy consumption and optimize production processes[61] - The company has set key performance indicators for major energy consumption metrics across its factories and established incentive systems for energy-saving projects[61] - The company adheres to strict environmental regulations in all operational regions, including compliance with local air quality standards[67] - The company emphasizes sustainable procurement principles, ensuring that all wood pulp is sourced legally and traceably[80] Corporate Governance - The board consists of 12 members, including 5 executive directors, 3 non-executive directors, and 4 independent non-executive directors[163] - The board held a total of 7 regular and ad-hoc meetings during the year, with all directors confirming their attendance[166] - The chairman of the board is Mr. Li Chaowang, while the CEO is Mr. Johann Christoph Michalski, ensuring a clear separation of roles[167] - Independent non-executive directors play a crucial role in ensuring effective corporate governance and provide necessary checks and balances[169] - The company has adopted a higher standard for its directors' securities trading conduct compared to the standard set by the listing rules[162] - The board is responsible for setting the overall strategy and policies of the group, ensuring adequate resources for implementation[165] Employee and Community Engagement - The employee turnover rate remained consistent with the previous year, with a total workforce of 10,918 employees[104] - The company received multiple HR awards in 2019, including "National Model Labor Relations Harmonious Enterprise" in China and "Malaysia Employer Brand Award 2019" in Malaysia[104] - The volunteer team provided 2,662 hours of social service, with 708 volunteers participating[135] - The "Vita Charity Foundation" has established 12 elder meal centers, serving approximately 105,000 meals in 2019[137] - The "Warm Delivery to Home" initiative visited 407 elderly individuals, providing care packages to those in need[137] Risk Management - The Risk Management Committee was established to enhance accountability and quality in risk management processes[196] - The Board conducted an annual review of the effectiveness of the risk management and internal control systems, finding them adequate and effective[197] - The internal audit function reported quarterly to the Audit Committee, ensuring systematic coverage of all audit areas[194] Innovation and Development - The company is committed to product and technology innovation, aiming to optimize its product mix and avoid price wars, focusing on quality to drive business growth[22] - The company aims to leverage its comprehensive channel layout and e-commerce advantages to capture market opportunities[48] - The company is focused on sustainable practices and innovation in its product offerings, aligning with global trends towards environmental responsibility[158]

Financial Performance - Revenue growth rate for the first half of 2019 was 7.6%, compared to 16.3% in 2018[13] - Gross profit margin decreased to 28.1% from 29.7% year-on-year[13] - Net profit margin remained stable at 5.6%, slightly down from 5.7% in the previous year[13] - Basic earnings per share increased to HKD 0.368 from HKD 0.349[13] - Total revenue increased by 7.6% to HKD 7,891 million, with a 15.0% growth in mainland China when adjusted for fixed exchange rates[20] - Gross profit rose by 1.8% to HKD 2,217 million, with a gross margin of 30.0% in Q2 2019, up 3.7 percentage points from Q1 2019[20] - EBITDA increased by 5.6% to HKD 1,179 million, maintaining an EBITDA margin of 14.9%, which is 3.7 percentage points higher than H2 2018[20] - Net profit rose by 5.4% to HKD 440 million, with a stable net profit margin of 5.6%[21] - The revenue for the six months ended June 30, 2019, was HKD 7,890,727,154, representing an increase from HKD 7,334,423,321 in the same period of 2018, which is a growth of approximately 7.6%[63] - The gross profit for the period was HKD 2,217,304,836, slightly up from HKD 2,177,968,212, indicating a marginal increase in gross margin[63] - Operating profit decreased to HKD 629,725,843 from HKD 643,465,246, reflecting a decline of about 2.1%[63] - Profit attributable to equity holders of the company increased to HKD 439,861,255, compared to HKD 417,365,105 in the previous year, marking an increase of approximately 5.4%[63] Dividends and Shareholder Returns - Interim dividend declared at HKD 0.070, up from HKD 0.060 in 2018[13] - The board declared an interim dividend of HKD 0.07 per share for the period, up from HKD 0.06 per share in 2018, totaling approximately HKD 83,649,816 based on 1,194,997,373 shares issued[28] - The interim dividend will be distributed to shareholders registered on August 26, 2019[28] - The interim dividend declared on July 17, 2019, was HKD 0.07 per share, up from HKD 0.06 per share in 2018, representing a 16.7% increase[121] Financial Position and Ratios - Current ratio improved to 1.06 from 1.03 year-on-year[13] - Debt ratio decreased to 55.3% from 65.2% in the previous year[13] - Net debt ratio improved to 49.9% from 59.7% year-on-year[13] - The net debt ratio was 49.9% as of June 30, 2019, compared to 53.5% as of December 31, 2018[28] - The effective tax rate decreased by 5.1 percentage points to 16.0%[21] - The company maintained a solid financial position with no asset pledges as of June 30, 2019[28] - The company reported a net financial asset impairment loss of HKD 1,629,925, compared to HKD 1,315,551 in the previous year, indicating an increase in impairment losses[63] Operational Efficiency and Capacity - Inventory turnover period remained stable at 46 days[13] - Accounts receivable turnover period improved to 42 days from 43 days[13] - Production capacity increased by 30,000 tons in Hubei, bringing total design capacity to 1,220,000 tons as of June 30, 2019[25] - The company plans to further increase production capacity by an additional 30,000 tons in Q4 2019, targeting a total capacity of 1,250,000 tons by the end of 2019[25] - The company emphasizes the importance of operational efficiency and cost control to support sustainable business growth[27] - The company will continue to enhance production and operational efficiency to support planned expansions for sustainable growth[167] Employee and Community Engagement - The company conducted 1,015 health and safety seminars in mainland China, with a total participation of 43,860 people, resulting in a 28.6% decrease in production-related accidents compared to the first half of 2018[26] - The company reported a total of 50,778 training hours across various regions, with 10,941 employees currently employed[26] - The company encourages employee participation in volunteer activities, contributing 1,401 hours of social service during the reporting period[26] - The company’s employee count reached 10,941 as of June 30, 2019, with 99% of employees having received training on the code of conduct[166] Strategic Initiatives and Market Position - The company aims to enhance brand competitiveness and profit margins by focusing on high-value product differentiation and innovation in the second half of 2019[27] - The company plans to leverage its e-commerce advantages to drive growth in personal care business, supported by increasing disposable income and consumer demand for innovative, high-quality products[27] - The company launched Libresse and Tena adult care pants in June, marking a significant milestone in its personal care product line in mainland China[27] - The company recognizes the growing demand for professional incontinence care products driven by an aging population in China[167] - The company partnered with the Taiwan Incontinence Association to raise awareness about incontinence care, enhancing its market presence in Taiwan[163] Corporate Governance and Compliance - The company has complied with all corporate governance codes as per the listing rules during the reporting period[44] - The Audit Committee is responsible for reviewing financial reporting procedures and internal controls[47] - The Remuneration Committee determines the remuneration policies for executive directors and senior management[48] - The Risk Management Committee assists the board in determining the group's risk levels and mitigation measures[50] - The Executive Committee is tasked with formulating the annual budget and major business plans[51] - The Strategy Development Committee proposes long-term strategic positioning and investment decisions[52] Related Party Transactions - Total sales to related parties for the six months ended June 30, 2019, amounted to HKD 90,281,606, a decrease of 4% from HKD 94,021,362 in 2018[127] - Significant sales to Uni-Charm reached HKD 55,711,523, up from HKD 55,033,452 in the previous year, indicating a growth of 1.2%[127] - Purchases from related parties totaled HKD 97,737,341, down from HKD 121,368,037 in 2018, reflecting a decrease of 19.5%[128] - Loans borrowed from Essity Treasury AB amounted to HKD 300,000,000, significantly higher than HKD 168,000,000 in the previous year, marking an increase of 78.6%[132] Risk Management - The company has not made any changes to its risk management policies since the end of the previous financial year[84] - The financial risk factors faced by the company include market risk, credit risk, and liquidity risk[84] - The company continues to assess the impact of new standards and interpretations on its financial reporting[82]

Financial Performance - The company's revenue for 2018 was HKD 14,879 million, an increase of 10.3% from HKD 13,486 million in 2017[11] - Gross profit for 2018 reached HKD 4,187 million, up from HKD 4,000 million in 2017, resulting in a gross margin of 28.1%[11] - Operating profit for 2018 was HKD 1,020 million, compared to HKD 984 million in 2017, with an operating margin of 6.9%[11] - The basic earnings per share for 2018 was HKD 0.544, an increase from HKD 0.526 in 2017[11] - The company declared a total dividend of HKD 0.200 per share for 2018, up from HKD 0.190 in 2017[11] - Net profit grew by 4.6% to HKD 649 million, resulting in a net profit margin of 4.4%[35] - Total revenue increased by 10.3% to HKD 14,879 million, with a growth of 7.8% at constant exchange rates[34] - Gross profit rose by 4.7% to HKD 4,187 million, achieving a gross margin of 28.1%[34] - Operating profit increased by 3.7% to HKD 1,020 million, with an operating margin of 6.9%[35] - The personal care segment's revenue increased by 7.3% to HKD 2,767 million, maintaining a gross margin of 30.4%[39] Debt and Financial Health - The net debt to EBITDA ratio improved to 2.4 times in 2018 from 2.6 times in 2017[11] - The company maintained a net debt ratio of 54% in both 2018 and 2017[11] - The company maintains a strong financial position with cash and bank balances of HKD 574,465,154 as of December 31, 2018, compared to HKD 534,589,786 in 2017[48] - The total short-term and long-term loans amounted to HKD 5,245,496,240, slightly up from HKD 5,236,274,370 in 2017, with 80.5% classified as medium to long-term debt[48] - The net debt-to-equity ratio stood at 54% as of December 31, 2018, unchanged from the previous year[48] - The unused credit facilities were approximately HKD 6.79 billion, significantly increased from HKD 2.94 billion in 2017[48] Operational Efficiency - The inventory turnover period increased to 49 days in 2018 from 41 days in 2017[11] - The company plans to increase production capacity by 60,000 tons in Hubei in 2019, bringing total designed annual production capacity to 1,250,000 tons by year-end[41] - The company is focusing on high-end product development in both personal care and tissue segments, leveraging successful experiences from Southeast Asia[25] - The company plans to maintain sales growth momentum in 2019 by improving product mix and enhancing cost control across business functions[29] - The company is actively pursuing multiple innovation projects, including product efficiency improvements and new product category development[29] Market and Product Development - In 2018, Vinda achieved double-digit revenue growth despite rising raw material costs and economic pressures, attributed to effective cost control and product price adjustments[33] - The company implemented a "one increase, one decrease" strategy to counteract high wood pulp costs, which included raising product prices while strictly managing expenses[24] - Vinda's product innovation and brand strength were recognized with the "Best Health and Hygiene Brand in China" award from Global Brands Magazine[24] - The company's sales channels are undergoing transformation, with e-commerce becoming the fastest-growing distribution channel, evidenced by strong sales during the Double Eleven shopping festival[29] - New product development includes the introduction of eco-friendly paper products, which are expected to capture a growing segment of environmentally conscious consumers[137] - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years[138] Environmental Responsibility - In 2018, the average comprehensive energy consumption per ton of paper decreased by 3.1% to 0.31 tons of standard coal, below the national standard limit of 0.42 tons[68] - The sulfur dioxide emissions per ten thousand tons of product decreased by 13.1% to 0.73 tons, while carbon dioxide emissions decreased by 4.1% to 10,726 tons, both below local environmental standards[63] - The company implemented energy-saving projects that effectively reduced energy consumption, with steam consumption per ton of paper decreasing by 1.3% to 0.78 tons[61] - Over 99% of the pulp purchased in 2018 was from certified sources, ensuring responsible sourcing[87] - The company’s factories utilize advanced desulfurization and denitrification technologies to control emissions effectively[61] Corporate Governance - The company has maintained compliance with all corporate governance codes as of December 31, 2018[147] - The board includes four independent non-executive directors, ensuring effective corporate governance and independent judgment on strategy and risk management[155] - The company has established a remuneration committee to determine the compensation policies for executive directors and senior management, considering factors such as market salaries and performance-linked pay[164] - The board retains decision-making authority over significant matters, including financial data and major transactions, with daily management delegated to the executive committee[157] - The company has provided appropriate insurance arrangements for its directors against potential legal claims[163] Employee Engagement and Training - The total training hours for the group in 2018 reached 137,967 hours, an increase from 85,753 hours in 2017, with an average training time of 14 hours per employee[120] - The employee engagement score exceeded 80%, which is higher than the average level in the manufacturing and retail sectors[110] - The group had a total of 11,250 employees as of December 31, 2018, with a turnover rate similar to the previous year[110] - The employee response rate for the engagement survey reached 98%, reflecting high employee satisfaction across 20 dimensions[110] Social Responsibility - The company has established 11 senior meal centers, serving approximately 120,000 meals to underprivileged elderly individuals by 2018[127] - The "Vinda Charity Foundation" supported 37 underprivileged students in continuing their education, including 10 new university students in 2018[127] - In 2018, the volunteer team provided a total of 1,954 hours of social services, with 528 volunteer participations throughout the year[125] Risk Management - The company is exposed to various financial risks, including market risks such as foreign exchange risk and interest rate risk[200] - The board reviewed the effectiveness of the risk management and internal control systems and deemed them adequate and effective for the year[183] - The company established a risk management committee on November 8, 2013, to enhance accountability and quality in risk management processes[183]