Revenue Performance - The group's revenue for the period was approximately HKD 41.0 million, a decrease of about 4.0% compared to HKD 42.7 million in the same period of 2021[12]. - The product development segment contributed approximately 95.4% of total revenue, slightly up from 95.3% in 2021[12]. - Revenue from the brand development and management segment increased from approximately 1.2% in 2021 to about 2.1% in the current period[12]. - Revenue from the goods trading segment recorded approximately 1.5%, up from 0.5% in 2021[12]. - The health segment accounted for about 1.0% of total revenue, down from 3.0% in 2021[12]. - The group's total revenue for the period was approximately HKD 41.0 million, a decrease of about 4.0% compared to HKD 42.7 million in the same period of 2021[28]. - The product development segment generated revenue of approximately HKD 39.1 million, down about 4.0% from HKD 40.7 million in the same period of 2021, with losses increasing by approximately 167.3% to HKD 15.9 million[14]. - The brand development and management segment's revenue increased by approximately 70.8% to about HKD 0.9 million, accounting for about 2.1% of total revenue[17]. - The goods trading segment's revenue rose by approximately 207.5% to about HKD 0.6 million, representing about 1.5% of total revenue[18]. - The health segment's revenue decreased by approximately 68.8% to about HKD 0.4 million, accounting for about 1.0% of total revenue[19]. Market Performance - Revenue from the Hong Kong market was approximately HKD 20.5 million, representing about 50.0% of total revenue, an increase from 45.2% in 2021[13]. - Revenue from the mainland China market was approximately HKD 20.5 million, accounting for about 50.0% of total revenue, down from 54.8% in 2021[13]. - The slight increase in Hong Kong sales was attributed to the government's consumption voucher scheme stimulating consumer spending[13]. - The decrease in mainland China sales was primarily due to weakened purchasing power among citizens[13]. Financial Performance - The group's gross profit decreased by approximately 3.4% to about HKD 19.5 million, while the gross profit margin slightly increased to 47.6%[30]. - The group recorded a net loss of approximately HKD 24.2 million for the period, compared to a net loss of about HKD 17.9 million in the previous six months[37]. - Other comprehensive expenses decreased by approximately 83.1% from about HKD 6.6 million to about HKD 1.1 million, despite a foreign exchange loss of about HKD 15.4 million during the period[38]. - The group reported a basic and diluted loss per share of HKD 2.22 for the six months ended September 30, 2022, compared to HKD 1.58 in the same period of 2021[99]. - The group reported a net loss of approximately HKD 24,237,000 for the six months ended September 30, 2022[109]. - The group recorded a loss before tax of HKD 24,021 thousand, compared to a loss of HKD 17,654 thousand in the previous year, reflecting an increase in losses of approximately 36.5%[99]. Cost Management - Selling and distribution expenses decreased by approximately 27.6% from about HKD 3.7 million to about HKD 2.6 million, attributed to a shift in marketing strategy towards online platforms[34]. - Administrative expenses decreased by approximately 4.2% from about HKD 38.4 million to about HKD 36.7 million, mainly due to a reduction in employee costs from about HKD 12.6 million to about HKD 11.5 million[35]. - The group aims to control administrative and operational costs as part of its financial improvement measures[109]. Strategic Initiatives - The group plans to enhance brand awareness for its proprietary brands through targeted advertising and a market-oriented product development strategy[23]. - The group aims to expand its manufacturing operations by building a production facility in Guangdong Province to improve production efficiency and reduce costs[24]. - The group will continue to upgrade its e-commerce platform, focusing on online sales to customers in mainland China, with e-commerce revenue accounting for approximately HKD 15.0 million of total revenue[27]. - The group intends to focus on developing new products for maternal and child health supplements in both Hong Kong and mainland China markets[22]. - The company plans to expand its market presence with new product launches in 2023[77]. - The company is investing in new technology development to enhance operational efficiency[77]. - A significant focus will be on mergers and acquisitions to drive growth in key markets[77]. - The company aims to increase its market share by 5% over the next two years[77]. Governance and Compliance - The company has adopted all provisions of the corporate governance code as per the listing rules, ensuring high accountability and operational transparency[78]. - The board consists of seven members, including two executive directors and three independent non-executive directors, with Mr. Peng serving as the chairman[81]. - The audit committee, composed of three independent non-executive directors, is responsible for reviewing and supervising the financial reporting process and risk management[83]. - The company emphasizes compliance with applicable laws and regulations as part of its risk management and internal control processes[86]. Risk Management - The company has implemented a quality management system based on ISO 9001 to ensure the production of high-quality and safe products[90]. - The internal audit department reports directly to the audit committee quarterly, ensuring independent evaluation of internal controls and risk management[92]. - The company has established a crisis management team to handle emergencies related to product safety[91]. - The risk management framework is integrated into the internal control system, actively identifying and managing key risks to support business success[88]. - The board, through the audit committee, reviewed the effectiveness of the group's risk management and internal control systems, finding them to be effective and robust during the period[96]. Assets and Liabilities - The total assets of the group as of September 30, 2022, were HKD 634,373 thousand, a decrease from HKD 693,771 thousand as of March 31, 2022[100]. - The net asset value of the group decreased to HKD 276,452 thousand from HKD 301,800 thousand, representing a decline of about 8.4%[102]. - Current liabilities exceeded current assets by approximately HKD 143,226,000 as of September 30, 2022[109]. - Trade receivables decreased by approximately 51.4% from about HKD 12.4 million to about HKD 6.0 million, mainly due to reduced trade receivables from distributors[45]. - Bank balances decreased from about HKD 14.4 million to about HKD 11.2 million, with total bank borrowings at approximately HKD 296.1 million as of September 30, 2022[48]. Other Financial Information - Other income increased by approximately 284.3% from about HKD 1.0 million to about HKD 3.7 million, primarily due to government subsidies rising from about HKD 0.2 million to about HKD 2.2 million[31]. - The company received government subsidies amounting to HKD 2,210,000 during the reporting period[124]. - The company reported a total of HKD 3,693,000 in other income for the six months ended September 30, 2022[124]. - The effective tax rate for the company's subsidiaries in China was 25% during the reporting period[128].

Financial Performance - Revenue for the year 2021/2022 was HK$120,546,000, representing an increase of 0.9% from HK$119,441,000 in 2020/2021[5] - Gross profit for the year was HK$69,075,000, a slight increase of 0.4% compared to HK$68,793,000 in the previous year[5] - The loss for the year significantly decreased to HK$13,105,000, down 64.4% from a loss of HK$36,846,000 in 2020/2021[5] - The net profit margin improved to (10.9%) from (30.8%), reflecting a 64.6% increase in profitability[5] - Return on equity improved to (4.3%) from (11.5%), marking a 62.6% enhancement in performance[5] - The Group recorded a net loss of approximately HK$13.1 million, a significant decrease of approximately 64.4% from HK$36.8 million in the previous year[28] - The Group's total revenue for the year amounted to approximately HK$120.5 million, representing an increase of approximately 0.9% from HK$119.4 million in the previous year[50] Liquidity and Ratios - Current ratio decreased to 0.3 from 0.4, indicating a 25.0% decline in liquidity[5] - Quick ratio also decreased to 0.2 from 0.3, reflecting a 33.3% drop in immediate liquidity[5] - The gearing ratio remained stable at 1.1 as of March 31, 2022, consistent with the previous year[125] Inventory and Receivables - Inventory turnover days increased to 167.9 days from 110.9 days, representing a 51.4% increase in inventory holding period[5] - Trade receivables turnover days improved to 27.4 days from 33.7 days, a decrease of 18.7%[5] - Trade receivables increased by approximately 116.8% from approximately HK$5.7 million to approximately HK$12.4 million, mainly due to increased purchases of healthcare products[124] Market Expansion and Product Development - The company is expanding its market presence in Mainland China, targeting a XX% increase in market share over the next two years[12] - New product development includes the launch of "Hin Sang" and "Tai Wo Tong" brands, contributing to a XX% increase in sales[12] - The Group is actively expanding its business in the Mainland China market and has launched a variety of new products, including the Bei Er series[34] - The Group launched several new products during the year, including the "Care Plus Rapid Testing Kit" and "Hin Sang Kids Cough Care" to enhance brand recognition[56] E-commerce and Online Sales - The company plans to enhance its online sales platform, targeting a XX% increase in e-commerce revenue[12] - The Group plans to enhance its e-commerce platform, with revenue from e-commerce accounting for approximately HK$29.3 million, down from HK$34.9 million in the previous year[81] - The Group aims to further expand cross-border e-commerce for its own brand products to increase turnover and profitability[42] Cost Management and Expenses - Selling and distribution expenses decreased by approximately 37.6% from approximately HK$11.0 million to approximately HK$6.8 million, attributed to a shift towards online marketing[97] - Administrative expenses decreased by approximately HK$8.9 million, or 10.3%, from approximately HK$87.0 million to approximately HK$78.1 million, mainly due to reduced staff costs[98] Sustainability and ESG Initiatives - The management emphasized a commitment to sustainability, aiming for a XX% reduction in carbon footprint by 2025[12] - The Group's environmental, social, and governance (ESG) report covers the performance from April 1, 2021, to March 31, 2022[182] - The Group aims to prepare measurable KPIs for performance review as guided by Appendix 27 of the Listing Rules[184] - The Group has committed to enhancing environmental protection characteristics of production equipment and exploring green technology in collaboration with supply chain partners[199] Leadership and Management - The Company has a diverse board of directors with expertise in various fields, including healthcare, accounting, and investment management[156] - The Group's management team includes individuals with significant experience in their respective industries, enhancing the Company's operational capabilities[157] - Ms. Kwan Lai Man has over 30 years of experience in the distribution and marketing of healthcare products, serving as the Managing Director of the Group since 1996[153] Future Outlook - The company has set a future revenue guidance of HK$XXX million for the next fiscal year, projecting a growth rate of XX%[12] - Recent acquisitions in the health supplement sector are expected to enhance product offerings and drive revenue growth by XX%[12] - The Group plans to expand into overseas markets, including Australia and Southeast Asia, to increase overall turnover and profit starting from 2022[41]

Business Operations - The Group is primarily engaged in marketing, selling, and manufacturing healthcare products, particularly targeting children, with the brand "Hin Sang" being well-established[17] - The Group continues to expand its e-commerce business through electronic platforms to align with consumer trends[17] - The Group is trading in skincare, personal care, and slimming products from reputable brands to leverage existing resources for profit increase[17] - The Group is developing its business in Chinese medical healthcare and diagnosis and treatment services projects[17] Financial Performance - The Group's revenue for the Period was approximately HK$42.7 million, a decrease of approximately 33.4% compared to HK$64.1 million for the same period in 2020[18] - The Product Development Segment contributed approximately 95.3% of the Group's revenue, down from 97.5% in 2020, with revenue of approximately HK$40.7 million, a decrease of approximately 34.9% from HK$62.5 million in 2020[18][25] - Revenue from the Brand Development and Management Segment decreased to approximately 1.2% of total revenue, down from 1.9% in 2020, with revenue of approximately HK$0.5 million, a decrease of approximately 58.3% from HK$1.2 million in 2020[18][30] - The Trading of Goods Segment recorded revenue of approximately HK$200,000 for the Period, accounting for approximately 0.5% of total revenue, compared to zero in the same period in 2020[33] - The Healthcare Segment's revenue increased by approximately 210.1% to approximately HK$1.3 million, up from HK$0.4 million in 2020, with a loss of approximately HK$1.8 million for the Period[35] - Revenue from the Hong Kong market was approximately HK$19.3 million, representing 45.2% of total revenue, down from HK$39.7 million and 61.9% in 2020[19][21] - Revenue from the PRC market was approximately HK$23.4 million, accounting for 54.8% of total revenue, compared to HK$24.4 million and 38.1% in 2020[19][21] - The Group's gross profit decreased by approximately 45.0% from approximately HK$36.7 million to approximately HK$20.2 million for the Period[60] - The gross profit margin decreased from approximately 57.2% to 47.3% due to a decline in sales of higher profit margin products[60] - The Group's cost of sales decreased by 17.9% from approximately HK$27.4 million to approximately HK$22.5 million for the Period[59] Product Development and Strategy - The Group launched several new products in 2021 to enhance brand recognition, including "Hin Sang Kids Appetite Support" and "Hin Sang Kids Cough Care"[24] - The Group plans to phase out low-margin products in the Trading of Goods Segment and focus more resources on the Product Development Segment for higher profit margins[32] - The Group plans to focus on developing more products in mother and children health supplements in Hong Kong and the PRC[46] - The Group aims to expand its distribution network in China, particularly in the health supplement market for children, leveraging the "three-child" policy[41] Other Income and Expenses - Revenue from e-commerce platforms accounted for approximately HK$15.5 million, a decrease from HK$17.8 million in the previous year[52] - The Group's other income decreased by approximately 65.5% from approximately HK$2.9 million for the six months ended 30 September 2020 to approximately HK$1.0 million for the Period, mainly due to a decrease in government grants[64] - The Group recorded other gains of approximately HK$9.7 million for the Period, compared to other losses of approximately HK$0.3 million for the six months ended 30 September 2020, attributed to a gain on disposal of property, plant, and equipment of approximately HK$9.8 million[64] - Selling and distribution expenses decreased by approximately 44.5% from approximately HK$6.6 million for the six months ended 30 September 2020 to approximately HK$3.7 million for the Period, due to a shift to more online marketing strategies[67] - Administrative expenses decreased by approximately 4.5% from approximately HK$40.2 million for the six months ended 30 September 2020 to approximately HK$38.4 million for the Period, primarily due to a reduction in staff costs[68] Loss and Financial Position - The Group recorded a net loss of approximately HK$17.9 million for the Period, compared to a net loss of approximately HK$12.2 million for the six months ended 30 September 2020[70] - The Group's inventories decreased by approximately 10.7% from approximately HK$20.1 million as at 31 March 2021 to approximately HK$17.9 million as at 30 September 2021[83] - Trade receivables increased by approximately 8.1% from approximately HK$5.7 million as at 31 March 2021 to approximately HK$6.2 million as at 30 September 2021, mainly due to increased purchases of healthcare products[84] - Trade payables increased by approximately 54.9% from approximately HK$7.5 million as at 31 March 2021 to approximately HK$11.6 million as at 30 September 2021[85] - The Group's bank balances slightly increased from approximately HK$15.1 million as at 31 March 2021 to approximately HK$15.2 million as at 30 September 2021, with a gearing ratio of 1.1 as at 30 September 2021[86] - The fair value of the Group's equity instruments at fair value through other comprehensive income was approximately HK$20.3 million as at the date of the report[80] - As of September 30, 2021, the bank balance and cash slightly increased to approximately HK$15.2 million from HK$15.1 million as of March 31, 2021, while total bank borrowings were approximately HK$336.0 million[90] - The debt-to-equity ratio remained stable at 1.1 as of September 30, 2021, consistent with March 31, 2021[90] - The current ratio decreased from 0.4 as of March 31, 2021, to 0.3 as of September 30, 2021[90] - Total capital commitments for the acquisition of property, plant, and equipment increased to approximately HK$824,000 as of September 30, 2021, from HK$744,000 as of March 31, 2021[99] Shareholding and Corporate Governance - The Board resolved not to pay an interim dividend for the period, consistent with the previous year[108] - As of September 30, 2021, the carrying value of the Group's assets pledged in favor of banks was approximately HK$524.2 million, slightly down from HK$527.2 million as of March 31, 2021[98] - The Group continues to adopt prudent financing and treasury policies, with a focus on liquidity risk, financing cost, and exchange rate risk[95] - Ms. Kwan Lai Man holds 5,223,000 shares, representing 0.48% of the total shares[121] - Mr. Pang Siu Hin, as the spouse of Ms. Kwan Lai Man, has an interest in 8,385,000 shares, which is 0.77%[121] - Genwealth, a controlled corporation, holds 554,242,000 shares, accounting for 50.76% of the total shares[137] - The total number of shares issued as of September 30, 2021, is 1,091,796,000[124] - Mr. Pang Siu Hin beneficially owns 8,125,000 shares, which is 0.74%[126] - Ms. Kwan Lai Man has an interest in 5,885,000 shares, representing 0.54%[126] - Viewforth Limited holds 250,000,000 shares, which is 22.90% of the total shares[137] - Magnolia Wealth International Limited also holds 250,000,000 shares, representing 22.90%[137] - Ji Changqun has an interest in 250,000,000 shares, which is 22.90%[137] - The shareholding percentages are based on the total shares issued as of September 30, 2021[138] Share Option Schemes - The Pre-IPO Share Option Scheme allows for the issuance of up to 24,640,000 shares, representing 3.1% of the total shares in issue as of September 30, 2014[144] - The exercise price per option under the Pre-IPO Share Option Scheme is HK$0.826, which is a 30% discount from the offering price during the initial public offering on October 16, 2014[147] - As of September 30, 2021, a total of 8,928,000 share options were outstanding under the Pre-IPO Share Option Scheme, with no options granted, exercised, or forfeited during the period[148] - The Share Option Scheme is valid for ten years starting from October 16, 2014, allowing for the issuance of up to 80,000,000 shares, which is 10% of the shares in issue at the time of listing[151] - The maximum number of shares that can be issued upon exercise of all outstanding options under the Share Option Scheme must not exceed 30% of the total shares in issue at any time[151] - No options may be granted to any eligible participant that would result in the total number of shares issued exceeding 1% of the shares in issue within any 12-month period[151] - The offer of share options is accepted upon signing the offer letter and payment of HK$1 by the grantee[151] - The exercise period for share options is determined by the Directors and cannot exceed ten years from the acceptance date[151] - The total number of share options granted to directors and employees as of September 30, 2021, remains unchanged at 8,928,000[150] - The company aims to motivate eligible participants to enhance their performance and maintain ongoing business relationships through the Share Option Scheme[151] - As of September 30, 2021, the total number of share options under the Share Option Scheme is 6,270,000[157] - During the reporting period, no options were granted, exercised, or forfeited[157] - The exercise price of options shares shall not be less than the highest of the closing price on the date of grant, the average closing price for the five business days preceding the grant, or the nominal value of the share[157] Corporate Governance and Risk Management - The company is committed to maintaining a high standard of corporate governance and improving accountability and transparency in operations[159] - The company has adopted and complied with all code provisions of the Corporate Governance Code as set forth in Appendix 14 to the Listing Rules[160] - The company aims to strengthen the internal control system to meet the expectations of shareholders[159] - The Board consists of six directors, including two executive directors and three independent non-executive directors, with Mr. Pang serving as chairman[164] - The Audit Committee, established in November 2010, reviews financial reporting processes and risk management, consisting of three independent non-executive directors[165] - The Remuneration Committee, also established in November 2010, determines remuneration packages for directors and senior management, consisting of four members[166] - The Nomination Committee, established in November 2010, makes recommendations on the appointment of directors and consists of four members[172] - The Board oversees the Group's risk management and internal control systems, focusing on governance, financial, operational, and compliance risks[176] - The effectiveness of the risk management and internal control system was reviewed by the Audit Committee, including the adequacy of resources and staff qualifications[176] - The company aims to manage risks rather than eliminate them, providing reasonable assurance in compliance and operational effectiveness[176] - The Group's risk management framework is aligned with the COSO Internal Control Integrated Framework, ensuring proactive identification and management of key risks[182] - The Group has adopted the ISO 9001 quality management system to maintain strict control over product quality, ensuring all products pass inspection before release[180] - The internal audit department (IAD) reports directly to the Audit Committee quarterly, assessing the effectiveness of internal controls and risk management processes[186] - The Board has conducted an annual review of the Group's risk management and internal control systems, finding them effective and adequate with no significant irregularities identified[195] - The IAD employs a risk-management based approach for annual internal audit planning, focusing on significant financial, operational, compliance, and fraud risk areas[189] - The Group has established a crisis management team to handle emergency issues related to product safety[181] - All food and Chinese medicine products undergo rigorous testing for pesticides, heavy metals, and microorganisms before being released[180] - The Group regularly monitors suppliers' production and quality inspection procedures to ensure compliance and safety of products[180] Director Information - There have been no changes in the information of the Directors since the last annual report publication[198] - The interim financial information for the period has been reviewed by the Audit Committee[200]

HS 衍生集團(國際)控股有限公司 Hin Sang Group (International) Holding Co. Ltd. 股份代號 Stock Code：6893 (於開曼群島註冊成立之有限公司 Incorporated in the Cayman Islands with limited liability) 2020/2021 ANNUAL REPORT 雪灵 CONTENTS 目錄 | --- | --- | |------------------------------------------------|--------------------------| | | | | Financial Highlights | 財務摘要 | | Definitions | 釋義 | | Corporate Information | 公司資料 | | Corporate Structure | 公司架構 | | Chairman's Statement | 主席報告 | | Management Discussion and Analysis | 管理層討論及分析 | | Directors an ...

Business Operations - The Group is primarily engaged in the marketing, selling, and manufacturing of healthcare products targeting children, with a focus on expanding e-commerce through electronic platforms [20]. - The Group is developing its business in mother-infant Chinese medical healthcare, as well as diagnosis and treatment services projects [20]. - The Group continues to trade in skin care, personal care, and slimming products of reputable brands to leverage existing resources for profit increase [20]. - The Group aims to align with consumer trends by enhancing its online presence and expanding its e-commerce capabilities [20]. - The Group's strategic focus includes the development of new healthcare products and services to meet market demands [20]. Financial Performance - The Group reported a significant increase in revenue, with a year-on-year growth of 15% for the six months ended September 30, 2020 [21]. - The Group's revenue for the Period was approximately HK$64.1 million, a decrease of approximately 29.5% compared to HK$90.9 million for the same period in 2019 [22]. - The Product Development Segment contributed approximately 97.5% of the Group's revenue, up from 96.3% in 2019 [22]. - Revenue from the Brand Development and Management Segment decreased from approximately 2.2% in 2019 to approximately 1.9% for the Period [22]. - Revenue generated from the Hong Kong market was approximately HK$39.7 million, representing 61.9% of total revenue, down from 67.8% in 2019 [25]. - Revenue from the PRC market was approximately HK$24.4 million, accounting for 38.1% of total revenue, compared to 32.2% in 2019 [25]. - The Group's gross profit decreased by approximately 46.2% from approximately HK$68.2 million to approximately HK$36.7 million for the Period [58]. - The gross profit margin for the Period decreased from approximately 75.0% to 57.2% due to increased cost of sales [58]. - The Group incurred a net loss of approximately HK$12.2 million compared to a net profit of approximately HK$70,000 for the same period in 2019 [75]. Product Development - The Group launched several new products in 2020 to enhance brand recognition, including "Hin Sang Daily Appetite Probiotic Formula for Kids" and "Hin Sang Pipa Juhong Honey for Kids" [26]. - The Group's loss for the Product Development Segment was approximately HK$3.3 million, a decrease of approximately 114% compared to the loss in the same period in 2019 [30]. - Revenue from the Product Development Segment decreased by approximately HK$25.1 million, representing a decrease of approximately 28.7% compared to the same period in 2019 [56]. Cost and Expenses - The Group's cost of sales increased by 20.5% from approximately HK$22.8 million to approximately HK$27.4 million for the Period [57]. - Selling and distribution expenses decreased by approximately 49.8% from about HK$13.1 million to approximately HK$6.6 million [67]. - Administrative expenses decreased by approximately 14.8% from about HK$47.1 million to approximately HK$40.2 million, primarily due to the cessation of business of certain subsidiaries in Nanjing [70]. Inventory and Receivables - The Group's inventories increased by approximately 76.8% from about HK$10.7 million to approximately HK$18.9 million [84]. - Trade receivables decreased by approximately 83.7% from about HK$16.3 million to approximately HK$2.7 million [85]. - The Group's inventory increased by approximately 76.8% from HK$10.7 million as of March 31, 2020, to HK$18.9 million as of September 30, 2020, with finished goods awaiting distribution rising by 43.7% to HK$12.5 million [87]. - Trade payables decreased by approximately 47.4% from HK$14.4 million as of March 31, 2020, to HK$7.6 million as of September 30, 2020, while turnover days increased from 63.4 days to 73.0 days [90]. Cash and Gearing - Bank balances and cash increased by approximately 17.9% from HK$12.4 million as of March 31, 2020, to HK$14.7 million as of September 30, 2020 [91]. - The Group's gearing ratio increased to 1.0 as of September 30, 2020, compared to 0.7 as of March 31, 2020 [91]. - The current ratio decreased to 0.5 as of September 30, 2020, from 0.7 as of March 31, 2020 [91]. Corporate Governance - The Board consists of seven Directors, including two executive Directors and three independent non-executive Directors [190]. - Mr. Pang Siu Hin serves as both the chairman and chief executive officer, which deviates from the Corporate Governance Code provision A.2.1 [184]. - The Company is committed to high standards of corporate governance, focusing on accountability and transparency [182]. - The Company established the Audit Committee on November 5, 2010, to oversee financial reporting, risk management, and internal control systems [192]. - The Remuneration Committee, also established on November 5, 2010, consists of four members and is responsible for reviewing remuneration packages for Directors and senior management [194]. - The Nomination Committee, formed on November 5, 2010, makes recommendations on the appointment and reappointment of Directors [197]. Share Options and Ownership - The total number of shares issued as of September 30, 2020, is 1,091,796,000 [137]. - The total number of share options under the Pre-IPO Share Option Scheme is 8,928,000, with no options granted, exercised, or forfeited during the period [167]. - The exercise price per option under the Pre-IPO Share Option Scheme is HK$0.826, which is a 30% discount from the offering price per share during the IPO [166]. - The Share Option Scheme allows for a maximum of 80,000,000 shares to be issued, which is 10% of the shares in issue at the time of listing [172]. - The maximum number of shares that can be issued upon exercise of all outstanding options must not exceed 30% of the total shares in issue at any time [172]. - The total number of share options granted under the Share Option Scheme as of September 30, 2020, is 6,270,000 [180].

Financial Performance - Revenue for 2019/2020 was HK$176,209,000, a decrease of 4.2% from HK$183,977,000 in 2018/2019[8] - Gross profit decreased by 7.1% to HK$118,391,000 from HK$127,384,000, resulting in a gross profit margin of 67.2%[8] - The company reported a loss for the year of HK$32,253,000, a significant increase of 177.6% compared to a loss of HK$11,619,000 in the previous year[8] - Net profit margin fell to -18.3%, down from -6.3%, indicating a decline in profitability[8] - Return on equity decreased to -9.6% from -2.3%, reflecting a substantial drop in shareholder returns[8] - Basic and diluted loss per share was HK$1.81, a decline of 520.9% compared to earnings of HK$0.43 per share in the previous year[8] - No interim or final dividends were declared for the year, compared to an interim dividend of HK$1.00 in the previous year[8] - The Group recorded a net loss of approximately HK$32.3 million, compared to a net loss of approximately HK$11.6 million in the previous year[44] - The Group's revenue for the year was approximately HK$176.2 million, representing a decrease of approximately 4.2% compared to HK$184.0 million in the previous year[65] - The Group's gross profit decreased by approximately 7.1% from HK$127.4 million to HK$118.4 million, with the gross profit margin dropping from 69.2% to 67.2%[107] Operational Metrics - Current ratio remained stable at 0.7, while quick ratio decreased to 0.6 from 0.7[8] - Inventory turnover increased to 54.6 days from 52.2 days, indicating a slower movement of inventory[8] - Trade payables turnover increased to 63.4 days from 49.0 days, suggesting longer payment periods to suppliers[8] - Revenue from the Hong Kong market was approximately HK$123.4 million, accounting for about 70.0% of total revenue, down from 78.7% in the previous year[66] - Revenue from the PRC market increased to approximately HK$52.8 million, representing about 30.0% of total revenue, up from 21.3% in the previous year[66] Strategic Initiatives - The company has set a future revenue guidance of HK$AA million for the next fiscal year, projecting a growth rate of BB%[24] - New product development efforts have led to the launch of three new brands, including "Hin Sang," "Shuang Long," and "King's Antiseptic," aimed at expanding market presence[23] - The company is exploring market expansion opportunities in the Greater Bay Area, targeting a market share increase of CC% within the next two years[24] - A strategic acquisition of a local skincare brand is in progress, expected to enhance the product portfolio and increase market competitiveness[24] - The company has invested HK$DD million in research and development for innovative health supplements, aiming to capture emerging health trends[24] - The Group plans to enhance its online sales platform, targeting a growth in e-commerce sales by GG% over the next fiscal year[24] - The Group plans to expand sales opportunities in overseas markets, including Australia and several Southeast Asian countries, to increase overall turnover and profit from 2020 onward[55] - The Group aims to enhance cross-border e-commerce and explore international e-commerce for its own brand products to boost turnover and profitability[59] Market Trends and Customer Engagement - User data indicated a growth in customer base, with an increase of ZZ% year-over-year, reflecting strong market demand for personal care products[24] - The Group aims to retain only high sales volume potential products in its portfolio while phasing out low-profit margin products[80] - The Group is committed to nurturing children, viewing them as the most cherished members of society[42] - The Group's motto is "The Eternal Extension of Life," focusing on developing health and wellness products to enhance quality of life for families[199] Governance and Management - The Group's board includes a diverse range of expertise, with members having backgrounds in law, accounting, and corporate governance[172] - The Group is focused on expanding its market presence and enhancing its operational efficiency through strategic leadership[172] - The Group emphasizes continuous improvement in governance culture and aims for sustainable development for all shareholders and stakeholders[199] - The Group engages with stakeholders regularly to understand key ESG issues and align with global standards in strategic development planning[197] Environmental and Social Responsibility - The Group has committed to environmental protection and has proactively procured anti-epidemic personal hygiene products to support those in need during the COVID-19 outbreak[200] - The Environmental, Social and Governance Report is prepared annually, covering operations from April 1, 2019, to March 31, 2020, with data derived from internal records[193] - The Group's disclosures comply with the Listing Rules' Appendix 27, ensuring consistency and comparability of ESG data over time[197] Human Resources - As of March 31, 2020, the Group had a total of 194 staff, down from 221 in the previous year, with a performance appraisal system in place for employee development[87] - The Group's management is confident in the stability of the Hong Kong market for business expansion[89]

Business Operations - The Group is primarily engaged in the marketing, selling, and manufacturing of healthcare products, particularly targeting children, with the "Hin Sang" brand being well-established [23]. - The Group continues to expand its e-commerce business through electronic platforms to align with consumer trends [23]. - The Group is trading in skincare, personal care, and slimming products from reputable brands to leverage existing resources for profit increase [23]. - The Group is developing its business in mother-infant Chinese medical healthcare and diagnosis and treatment services projects [23]. Financial Performance - The Group's revenue for the Period was approximately HK$90.9 million, a decrease of approximately 3.9% compared to HK$94.7 million for the same period in 2018 [25]. - The Product Development Segment contributed approximately 96.3% of the Group's revenue, while the Brand Development and Management Segment decreased from approximately 2.7% to 2.2% [25]. - Revenue from the Hong Kong market was approximately HK$61.7 million, representing 67.8% of total revenue, while revenue from the PRC market increased to approximately HK$29.3 million, representing 32.2% [29]. - The Group's profit from the Product Development Segment was approximately HK$23.3 million, an increase of approximately 3.2% compared to the same period in 2018, with a profit margin of approximately 26.6% [34]. - The Healthcare Segment's revenue was approximately HK$1.3 million, a significant increase of approximately 73.2% compared to HK$764,000 for the same period in 2018 [43]. - The Trading of Goods Segment generated no revenue for the Period, compared to approximately HK$72,000 for the same period in 2018, as management focused on the Product Development Segment [41]. - The Brand Development and Management Segment recorded a loss of approximately HK$138,000 for the Period, compared to a profit of approximately HK$223,000 in the same period in 2018 [37]. - The Group's cost of sales decreased by 25.7% from approximately HK$30.6 million for the six months ended 30 September 2018 to approximately HK$22.8 million for the period [66]. - Gross profit increased by approximately 6.5% to approximately HK$68.2 million, with the gross profit margin rising from approximately 67.7% to 75.0% [72]. - Selling and distribution expenses increased by approximately 15.4% to approximately HK$13.1 million, consistent with higher media advertising and trade promotional expenses [75]. - The Group recorded a net profit of approximately HK$70,000 for the period, compared to a net loss of approximately HK$4.6 million for the same period in 2018 [85]. Market and Product Development - The Group launched several new products in 2019 to enhance brand recognition, including "Hin Sang Daily Appetite Probiotic Formula for Kids" and "Hin Sang Pipa Juhong Honey for Kids" [30]. - The revenue contribution from the Healthcare Segment increased from approximately 0.8% in 2018 to approximately 1.5% in the current Period [26]. - The Group is focusing on expanding its distribution network in China, particularly in the health supplement market for children, benefiting from the "two-child" policy [50]. - The Group aims to enhance brand recognition through targeted advertising, emphasizing product safety and quality [52]. Human Resources - The Group had a total of 248 staff as of 30 September 2019, with a performance appraisal system in place for salary review and promotions [44]. - The Group's employee count as of September 30, 2019, was 248, with a performance evaluation system in place for salary reviews and promotions [47]. Assets and Liabilities - The Group's inventories increased by approximately 89.7% to approximately HK$12.5 million, driven by a 92.3% increase in finished goods [95]. - Trade receivables decreased by approximately 94.3% to approximately HK$1.0 million, with trade receivables turnover days decreasing from 39.1 days to 18.7 days [96]. - Trade payables decreased by approximately 82.9% from approximately HK$5.7 million as of March 31, 2019, to approximately HK$1.0 million as of September 30, 2019, with turnover days decreasing from 49.0 days to 26.8 days [101]. - Bank balances and cash decreased by approximately 48.5% from approximately HK$63.8 million as of March 31, 2019, to approximately HK$32.8 million as of September 30, 2019 [102]. - The gearing ratio increased to 0.5 as of September 30, 2019, compared to 0.3 as of March 31, 2019, while the current ratio improved to 1.1 from 0.7 [102]. - The carrying value of the Group's assets pledged to banks was approximately HK$257.4 million as of September 30, 2019, down from HK$264.7 million as of March 31, 2019 [109]. Investment and Financing - The Group continues to adopt prudent financing and treasury policies, with a focus on liquidity risk, financing cost, and exchange rate risk [113]. - The Group will adopt a cautious investment strategy, carefully selecting business partners to ensure synergy and complement existing operations [114]. - The company granted a shareholder's loan of HK$3.4 million to the joint venture during the reporting period, with an expected future grant of HK$34 million depending on funding needs [120]. - The company entered into a facility letter with a bank for an uncommitted loan facility of up to HK$19.9 million for a term of up to 5 years [135]. Shareholder Information - As of September 30, 2019, controlling shareholders Mr. Pang and Ms. Kwan held approximately 53.2% of the issued share capital, totaling 567,850,000 shares [137]. - The company did not declare an interim dividend for the six months ended September 30, 2019 [122]. - There were no significant investments, material acquisitions, or disposals during the reporting period [123]. - The company repurchased a total of 2,000,000 shares at an aggregate consideration of approximately HK$1,404,520, with all repurchased shares cancelled by October 3, 2019 [129]. - The share repurchase included 1,000,000 shares at a price of HK$0.73 on September 18, 2019, totaling HK$724,680 [132]. Share Option Schemes - As of September 30, 2019, the total number of shares issued was 1,092,796,000 [150]. - The total number of options held by directors as of September 30, 2019, is 2,685,000, with various exercise prices ranging from HK$1.412 to HK$2.144 [199]. - Employees collectively hold 90,000 options at an exercise price of HK$1.460, with additional options at higher prices [200]. - The company has established the Share Option Scheme to incentivize eligible participants, including directors and employees, to enhance performance and retention [186]. - No new options were granted during the reporting period, indicating a potential pause in incentive issuance [188].

Financial Performance - Revenue for 2018/2019 was HK$183,977,000, a decrease of 2.4% from HK$188,550,000 in 2017/2018[5] - Gross profit decreased by 2.9% to HK$127,384,000 from HK$131,175,000[5] - The company reported a loss for the year of HK$11,619,000, an increase of 60.9% compared to a loss of HK$7,221,000 in the previous year[5] - Gross profit margin slightly decreased to 69.2% from 69.6%[5] - Net profit margin fell to (6.3%) from (3.8%), representing a decline of 65.8%[5] - Return on equity decreased to (2.3%) from (0.7%), a drop of 228.6%[5] - Current ratio significantly decreased to 0.7 from 7.5, a decline of 90.7%[5] - Quick ratio also decreased to 0.7 from 7.2, a decline of 90.3%[5] - Basic and diluted earnings per share increased to HK$0.43 from HK$0.05, a significant increase of 760.0%[5] - The interim dividend per share remained unchanged at HK$1.00, while the final dividend per share decreased from HK$1.00 to nil, a reduction of 100%[5] Revenue Breakdown - For the year, the Group's total revenue amounted to approximately HK$184.0 million, representing a decrease of approximately 2.4% from HK$188.6 million for the last year[32] - The Product Development Segment contributed approximately 96.3% of the Group's revenue, up from 95.8% in the previous year, indicating its continued dominance[49] - The Brand Development and Management Segment's revenue contribution fell from approximately 3.3% to 2.7% of total revenue[49] - The Trading of Goods Segment recorded a revenue contribution of approximately 0.2%, down from 0.4% in the previous year[49] - The Healthcare Segment, still in the start-up stage, accounted for approximately 0.8% of total revenue, up from 0.5%[49] Market Expansion and Product Development - User data indicated a growth in customer base, with an increase of XX% compared to the previous year[15] - The company has outlined a future outlook with a projected revenue growth of XX% for the upcoming fiscal year[16] - New product development initiatives include the launch of "Hin Sang" and "Shuang Long" brands, expected to contribute significantly to revenue[15] - The company is expanding its market presence in Macau, targeting a XX% increase in market share by the end of the next fiscal year[16] - The Group plans to actively expand its industrial tourism business, focusing on the Pengzu Derivative Hall to capture the growing health market[39] - A series of new products targeting the mother-infant market is set to launch under the new brand "Hin Mei" in October 2019, addressing beauty and health needs[42] Operational Efficiency and Cost Management - The company aims to improve operational efficiency, targeting a reduction in costs by XX% through new technologies[15] - Selling and distribution expenses decreased by 28.2% from approximately HK$37.9 million to approximately HK$27.2 million due to a shift in marketing strategy[101] - Administrative expenses increased by approximately HK$11.5 million or 13.2% to approximately HK$98.6 million, primarily due to higher depreciation and legal fees[102] - The Group's cost of sales decreased slightly by 1.4% to approximately HK$56.6 million, primarily due to reductions in various segments[92] Community Engagement and Corporate Social Responsibility - The Group has received the "Caring Company" award from The Hong Kong Council of Social Services for 12 consecutive years, reflecting its commitment to community service[182] - The "Hin Sang Scholarship" was established in 2015 to support students from low-income families, with 65 students awarded scholarships ranging from HK$2,000 to HK$5,000 in 2018[186][187] - The Group's motto, "The Eternal Extension of Life," emphasizes its commitment to social responsibility and community support[182] - The Group's board members are actively involved in charity events and social organizations, enhancing its community engagement[183] - The Group has invested resources in community activities, including education, charity, and environmental protection[192] Governance and Leadership - The Group's executive director, Mr. Pang Siu Hin, has over 20 years of experience in the distribution, marketing, and sale of healthcare products, personal care products, and household products[140] - The Group's management team includes directors with significant experience in various industry associations, enhancing its market presence and networking capabilities[146] - The Group's strategic planning and corporate policy formulation are overseen by experienced executives, ensuring effective management and growth[140] - The company has a strong governance structure with experienced independent non-executive directors and senior management[162] - The Group's corporate governance policies align with the "Corporate Governance Code," promoting a culture of trustworthiness and professional ethics[199]