Financial Performance - The group's revenue for the six months ended June 30, 2020, was approximately RMB 140.1 million, a decrease of about 7.4% compared to the same period last year, primarily due to reduced sales in Pakistan and other overseas markets impacted by COVID-19[8]. - The net profit attributable to the company's owners for the period was approximately RMB 3.4 million, a decrease of about 40.4% compared to RMB 5.7 million in the same period last year[16]. - Revenue for the six months ended June 30, 2020, was RMB 140.1 million, a decrease of 7.4% compared to RMB 151.3 million for the same period in 2019[32]. - Gross profit for the six months ended June 30, 2020, was RMB 30.7 million, compared to RMB 31.5 million for the same period in 2019[32]. - The company reported a net profit of RMB 6.0 million for the six months ended June 30, 2020, down from RMB 5.7 million in the same period of 2019[32]. - The total comprehensive income attributable to owners of the company for the six months ended June 30, 2020, was RMB 6,123,000, down from RMB 5,697,000 in 2019, reflecting a decrease of 7.47%[34]. - For the six months ended June 30, 2020, the company's operating profit decreased to RMB 7,926,000 from RMB 8,083,000 in the same period of 2019, representing a decline of approximately 1.9%[68]. - The basic earnings per share for the six months ended June 30, 2020, was RMB 0.67, down from RMB 1.14 in the same period of 2019, indicating a decrease of about 41.2%[76]. Cost and Expenses - The cost of sales decreased by approximately RMB 10.5 million or about 8.8% to approximately RMB 109.3 million, attributed to weakened market demand and reduced product orders[9]. - The gross profit slightly decreased by approximately RMB 0.8 million or about 2.5% to approximately RMB 30.7 million, with a gross margin increase to 21.9% from 20.8% in the previous period due to lower production costs[10]. - Selling expenses decreased by approximately RMB 0.5 million or 5.9% to about RMB 8.0 million, primarily due to reduced travel and entertainment expenses[12]. - Administrative expenses increased by approximately RMB 1.2 million or 7.2% to about RMB 17.8 million, mainly due to higher employee costs and legal and professional fees[13]. - Financial expenses increased by approximately RMB 0.6 million or 66.7% to about RMB 1.5 million, primarily due to increased interest expenses from bank borrowings[15]. Assets and Liabilities - The group's current assets were approximately RMB 182.8 million, including cash and cash equivalents of approximately RMB 24.6 million, while current liabilities were approximately RMB 254.3 million, resulting in a current ratio of about 0.72[18]. - The debt-to-equity ratio as of June 30, 2020, was approximately 0.71, an increase from 0.62 as of December 31, 2019, mainly due to increased secured bank borrowings[18]. - The company's total assets as of June 30, 2020, were RMB 453,045,000, slightly down from RMB 454,637,000 as of December 31, 2019, indicating a decrease of 0.35%[36]. - The company's total liabilities decreased to RMB 258,611,000 as of June 30, 2020, from RMB 262,746,000 as of December 31, 2019, a reduction of 1.29%[38]. - As of June 30, 2020, the group's current liabilities exceeded current assets by RMB 71.5 million[50]. - The company’s inventory decreased to RMB 39,554,000 as of June 30, 2020, from RMB 47,094,000 as of December 31, 2019, reflecting a decline of 16.00%[36]. - The total inventory as of June 30, 2020, was RMB 82,582,000, down from RMB 97,067,000 as of December 31, 2019, indicating a decrease of approximately 14.9%[80]. - The total trade and other receivables as of June 30, 2020, amounted to RMB 89,875,000, compared to RMB 105,485,000 as of December 31, 2019, reflecting a reduction of approximately 14.8%[81]. - The company reported a decrease in trade payables to RMB 40,864,000 as of June 30, 2020, down from RMB 59,798,000 as of December 31, 2019, which is a decline of approximately 31.8%[86]. - As of June 30, 2020, trade payables and other payables amounted to RMB 84,364,000, a decrease of 20.2% from RMB 105,798,000 as of December 31, 2019[89]. Cash Flow and Investments - Cash flow from operating activities increased significantly to RMB 12,396,000 for the six months ended June 30, 2020, compared to RMB 5,852,000 in 2019, marking an increase of 111.63%[42]. - The company reported a net cash inflow from financing activities of RMB 15,965,000 for the six months ended June 30, 2020, compared to RMB 40,710,000 in 2019, indicating a decrease of 60.69%[42]. - The company’s cash flow from investing activities showed a net outflow of RMB 18,303,000 for the six months ended June 30, 2020, compared to RMB 10,675,000 in 2019, indicating an increase in investment activities[42]. - The company invested approximately RMB 11,923,000 in property, plant, and equipment for the six months ended June 30, 2020, compared to RMB 7,536,000 in the same period of 2019, representing an increase of about 58.5%[77]. Future Outlook and Plans - The company plans to utilize approximately RMB 4.7 million of unutilized funds for the construction of a new PVC furniture film lamination production line, which has been delayed due to slow market growth[27]. - The new factory, including the main office building and equipped staff dormitory, is expected to be completed by the end of 2020, enhancing production capacity and efficiency[29]. - The company aims to strengthen its R&D capabilities to optimize its product mix and improve production efficiency, focusing on high-definition product development and production technology improvements[30]. - The company remains optimistic about business recovery despite challenges posed by COVID-19 and ongoing geopolitical tensions[29]. - The group anticipates continued efforts to enhance its working capital situation in the future[51]. Corporate Governance and Compliance - The company has confirmed compliance with the corporate governance code, except for the separation of the roles of Chairman and CEO, which are held by the same individual[119]. - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited interim consolidated results for the six months ended June 30, 2020[120]. - The interim report for the six months ended June 30, 2020, has been prepared in accordance with applicable accounting standards and regulations[122]. Shareholder Information - The major shareholder, Mr. Sheng, holds 249,940,000 shares, representing 49.99% of the total shares issued[108]. - Bright Commerce, a controlled entity of Mr. Sheng, holds 239,950,000 shares, accounting for 47.99% of the total shares[112]. - The company did not recommend any interim dividend for the six months ended June 30, 2020, consistent with the previous year[94].

SHENGLONG SPLENDECOR INTERNATIONAL LIMITED 盛 龍 錦 秀 國 際 有 限 公 司 (incorporated in the Cayman Islands with limited liability) (Stock Code: 8481) 2020 FIRST QUARTERLY REPORT SHENGLONG SPLENDECOR INTERNATIONAL LIMITED 盛 龍 錦 秀 國 際 有 限 公 司 (於開曼群島註冊成立的有限公司) (股份代號: 8481) 第一季度業績 報告 2020 香港聯合交易所有限公司（「聯交所」）GEM特色 GEM乃為較其他於聯交所上市的公司帶有較高投資風險的中小型公司提供一個上市市場。 有意投資者應了解投資該等公司的潛在風險，並經過審慎周詳考慮後方才作出投資決定。 由於GEM上市公司一般為中小型公司，於GEM買賣的證券可能會較於聯交所主板買賣的證 券承受較大的市場波動風險，同時無法保證於GEM買賣的證券會有高流通市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不 發表任何聲明，並明確 ...

Financial Performance - Total revenue for the year 2019 was RMB 347.3 million, a slight decrease of 0.6% from RMB 349.4 million in 2018[9] - Profit before tax increased significantly by 49.0% to RMB 22.4 million from RMB 15.0 million in the previous year[9] - Net profit attributable to owners rose by 40.1% to RMB 19.2 million compared to RMB 13.7 million in 2018[9] - Basic and diluted earnings per share increased to RMB 3.85, up from RMB 2.75, representing an increase of 1.10 cents[9] - Gross profit increased to approximately RMB 85.4 million, up by about RMB 14.9 million from RMB 70.5 million in the previous year, resulting in a gross margin of approximately 24.6%[29][30] - Net profit margin increased to 5.5%, compared to 3.9% in 2018, indicating enhanced profitability[9] Assets and Liabilities - Non-current assets grew by 12.0% to RMB 263.2 million from RMB 234.9 million in 2018[9] - Current assets slightly increased by 1.3% to RMB 191.5 million, while current liabilities remained stable at RMB 248.0 million[9] - The current ratio as of December 31, 2019, was approximately 0.77, slightly up from 0.76 in 2018, indicating a stable liquidity position despite current liabilities exceeding current assets by RMB 56.5 million[41] - The total bank borrowings as of December 31, 2019, amounted to approximately RMB 118.3 million, a 6.8% increase from RMB 110.8 million in 2018[41] - The net current liabilities of the group as of December 31, 2019, amounted to approximately RMB 565 million, including RMB 1,083 million in current bank borrowings and RMB 460 million in bank acceptance notes payable, due within the next twelve months[171] Operational Efficiency - Gross profit margin improved to 24.6%, up from 20.2% in the previous year, reflecting better cost management[9] - Interest coverage ratio improved significantly to 10.94 times, up from 7.04 times, showing better ability to meet interest obligations[9] - Inventory turnover days increased to 63.5 days from 57.4 days, indicating a longer holding period for inventory[9] - Sales costs decreased by approximately RMB 17.1 million or 6.1% to about RMB 261.8 million, mainly due to reduced production costs[28] - Administrative expenses increased by approximately RMB 5.8 million or 17.7% to about RMB 38.6 million, primarily due to rising employee costs and travel expenses[32] Market and Sales - Sales of decorative paper and paint paper in the Pakistan market decreased by approximately 5.6% and 34.6% respectively, impacting overall revenue[26] - Trade receivables increased by approximately RMB 7.3 million to RMB 93.3 million as of December 31, 2019, resulting in an increase in trade receivables turnover days to about 94.2 days[43] - The company is focusing on business expansion despite external uncertainties, with a stable performance from team members[20] Construction and Capital Expenditures - The construction contract for a new factory and office building was signed for a total price of RMB 54 million, expected to be completed by the end of 2020[19] - A construction contract for a new factory was signed on December 20, 2019, with a total value of RMB 54 million, aimed at supporting future business expansion[48] - The group has committed capital expenditures of approximately RMB 51.9 million for the acquisition of properties, plants, and equipment as of December 31, 2019[52] COVID-19 Impact - The group's production facilities were shut down from February 1 to February 14, 2020, due to COVID-19, which may impact performance in the first half of 2020[58] - The management believes it is impractical to estimate the financial impact of COVID-19 on the group at this time, but will remain vigilant and maintain close communication with stakeholders[58] Risk Management - The group faces risks including reliance on sales agents for new customer acquisition, which could adversely affect revenue and brand recognition if not managed effectively[60] - Fluctuations in raw material prices or unstable supply may negatively impact the group's operations and profitability[61] - The absence of long-term supply contracts with suppliers could adversely affect production costs and timelines if supply is not secured[62] - Maintaining current utilization levels of production facilities is critical, as failure to do so could significantly impact profit margins and profitability[63] Corporate Governance - The company has established a compliance advisor agreement, with no interests held by the compliance advisor that require disclosure under GEM Listing Rules[131] - The board consists of four executive directors and three independent non-executive directors, responsible for corporate policy, business strategy, and risk management[136] - The company has committed to enhancing corporate governance standards to maintain investor confidence and increase shareholder returns[134] - The board meets quarterly, ensuring regular oversight and governance of the company's activities[144] Environmental Responsibility - The company has established comprehensive waste management systems to prevent pollution and control environmental impact, adhering to various environmental laws and standards[197] - The company focuses on technological innovation and R&D, having obtained multiple invention and design patents over the years[192] - The company is committed to developing environmentally friendly decorative materials, aligning with its mission to create value for customers and opportunities for employees[192] - The company ensured compliance with the "Comprehensive Emission Standard of Air Pollutants" and "Comprehensive Discharge Standard of Pollutants" during the reporting period, with no violations reported[198] Shareholder Relations - The company has adopted a dividend policy aimed at balancing shareholder expectations with prudent capital management, with the dividend payout ratio determined by the board from time to time[163] - The company encourages shareholder participation and feedback during meetings to enhance governance practices[146] - The board maintains ongoing communication with shareholders, particularly during annual general meetings[146]

Financial Performance - For the nine months ended September 30, 2019, the company's revenue was approximately RMB 262.5 million, an increase of about 2.7% compared to the same period in 2018[4] - The gross profit for the same period was approximately RMB 53.9 million, representing an increase of about 10.9% year-over-year[4] - The profit attributable to the owners of the company was approximately RMB 12.3 million, a significant increase of about 41.4% compared to RMB 8.7 million for the same period in 2018[16] - The basic earnings per share for the nine months ended September 30, 2019, was approximately RMB 2.45, compared to RMB 1.74 for the same period in 2018[4] - The gross profit margin improved to 20.5% for the nine months ended September 30, 2019, compared to 19.0% for the same period in 2018[9] - The company reported a revenue of RMB 111,120 thousand for the three months ended September 30, 2019, compared to RMB 92,453 thousand for the same period in 2018, representing a year-over-year increase of approximately 20.1%[30] - For the nine months ended September 30, 2019, the company achieved a revenue of RMB 262,455 thousand, up from RMB 255,683 thousand in the same period of 2018, reflecting a growth of about 2.9%[30] - The gross profit for the three months ended September 30, 2019, was RMB 22,391 thousand, compared to RMB 18,377 thousand in 2018, indicating a gross margin improvement[30] - The net profit for the three months ended September 30, 2019, was RMB 6,590 thousand, an increase of 48.2% from RMB 4,445 thousand in the same period of 2018[30] - The company reported a net profit of RMB 12,273 thousand for the nine months ended September 30, 2019, compared to a profit of RMB 0 in the previous period[64] - The total comprehensive income for the nine months ended September 30, 2019, was RMB 11,898 thousand, a decrease from RMB 12,273 thousand in the previous year due to currency translation differences[64] Expenses and Income - Sales expenses for the period were approximately RMB 12.2 million, remaining relatively stable compared to RMB 12.7 million for the same period in 2018[12] - Administrative expenses decreased by approximately RMB 0.9 million or 3.1% to about RMB 28.5 million for the period[13] - Other income and net gains decreased by approximately RMB 2.7 million or 51.9% to about RMB 2.5 million, primarily due to a reduction in foreign exchange gains[14] - Other income for the nine months ended September 30, 2019, totaled RMB 2,477 thousand, down from RMB 5,194 thousand in the same period of 2018, reflecting a decrease of approximately 52.34%[66] Market and Customer Base - The company served over 400 customers in domestic and international markets during the reporting period, with sales across more than 30 countries[6] - Revenue from China for the nine months ended September 30, 2019, was RMB 151,685 thousand, compared to RMB 146,217 thousand in 2018, indicating a growth of about 3.20%[64] - Revenue from Pakistan decreased significantly to RMB 38,875 thousand for the nine months ended September 30, 2019, down from RMB 54,905 thousand in 2018, a decline of approximately 29.16%[64] Future Plans and Investments - The company plans to utilize approximately RMB 2.0 million for solvent recovery equipment and RMB 4.7 million for a new PVC furniture film lamination production line by December 31, 2020[25] - The company has postponed the purchase of solvent recovery equipment and the construction of the new PVC furniture film lamination production line due to slower-than-expected growth in PVC decorative film products[25] - The company aims to enhance its R&D capabilities to optimize product mix and improve production efficiency, focusing on technologies such as plate roller engraving and ink development[27] - The company anticipates that the replacement of the existing production line for decorative paper will be completed by June 30, 2020, with an estimated cost of RMB 1.8 million[25] Shareholder Information - As of September 30, 2019, Mr. Sheng holds 249,940,000 shares, representing 49.99% of the company's equity[88] - Bright Commerce, a controlled entity of Mr. Sheng, holds 239,950,000 shares, accounting for 47.99% of the company's equity[92] - The weighted average number of ordinary shares issued during the period remained constant at 500,000,000 shares[81] Corporate Governance - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and internal controls[104] - The company has confirmed adherence to the corporate governance code, except for the combined roles of Chairman and CEO held by Mr. Sheng, which the board believes is in the best interest of the company[100] - The company has adopted the GEM Listing Rules regarding the trading of securities by directors, confirming compliance throughout the reporting period[99] - The company has not established any arrangements for directors to acquire shares or debt securities of the company or any other corporation during the period[96] - The company has not granted any stock options since the adoption of the stock option plan in June 2017[84] - There were no purchases, sales, or redemptions of the company's listed securities during the period[85] - As of September 30, 2019, there were no interests held by directors or controlling shareholders in any competing businesses[97] Taxation - The effective corporate income tax rate for the group entities in China is 25%, while Shenglong Decoration enjoys a preferential tax rate of 15% due to its high-tech enterprise certification[80] Accounting and Reporting - The company has adopted new accounting standards that may impact future financial reporting, particularly regarding lease recognition[55] - The audit committee reviewed the unaudited consolidated results for the period, affirming compliance with applicable accounting standards[104]

Revenue and Profitability - The group's revenue for the six months ended June 30, 2019, was approximately RMB 151.3 million, a decrease of about 7.3% compared to the same period last year, primarily due to reduced sales in the Chinese and Pakistani markets[8] - The net profit attributable to the company's owners for the period was approximately RMB 5.7 million, representing an increase of about 32.6% compared to RMB 4.3 million for the same period last year[18] - Revenue from external customers for the six months ended June 30, 2019, totaled RMB 151.3 million, a decrease of 7.3% compared to RMB 163.2 million for the same period in 2018[81] - The gross profit for the six months ended June 30, 2019, was RMB 31.5 million, compared to RMB 30.3 million for the same period in 2018[37] - The basic and diluted earnings per share for the six months ended June 30, 2019, were RMB 1.14, up from RMB 0.85 for the same period in 2018, reflecting a growth of 34.1%[94] Costs and Expenses - The cost of sales decreased from approximately RMB 133.0 million to about RMB 119.8 million, a reduction of approximately RMB 13.2 million or 9.9%, attributed to weaker market demand[9] - Administrative expenses decreased by approximately RMB 2.1 million or 11.2% to about RMB 16.6 million, mainly due to reduced employee benefits related to the departure of senior finance personnel[15] - Other income and net gains decreased by approximately RMB 1.7 million or 65.4% to about RMB 0.9 million, mainly due to foreign exchange losses from the depreciation of the US dollar against the RMB[16] - The depreciation and amortization expenses for the six months ended June 30, 2019, were RMB 8,083,000, compared to RMB 7,462,000 for the same period in 2018, an increase of 8.3%[85] - The income tax expense for the three months ended June 30, 2019, was RMB 840,000, compared to RMB 550,000 for the same period in 2018, representing a rise of 52.7%[86] Assets and Liabilities - The group's current assets amounted to approximately RMB 233.2 million, with cash and cash equivalents of about RMB 51.6 million, an increase of approximately RMB 34.7 million from the previous year[20] - Total assets increased to RMB 470,174 thousand as of June 30, 2019, compared to RMB 423,869 thousand as of December 31, 2018, representing an increase of approximately 10.9%[43] - Total liabilities increased to RMB 291,941 thousand, compared to RMB 251,333 thousand, reflecting a rise of approximately 16.2%[45] - The company's total equity attributable to owners increased to RMB 178,233 thousand from RMB 172,536 thousand, an increase of approximately 3.9%[45] - As of June 30, 2019, the group's current liabilities exceeded current assets by RMB 16.5 million, with RMB 115.5 million in current bank loans due within the next twelve months[63] Cash Flow and Financing - Net cash flow from operating activities decreased to RMB 4,723 thousand, down from RMB 11,399 thousand, a decline of about 58.5%[53] - The company reported a net cash inflow from financing activities of RMB 40,710 thousand, compared to a net outflow of RMB 7,262 thousand in the previous period[55] - Cash and cash equivalents at the end of the period reached RMB 51,646 thousand, compared to RMB 8,857 thousand at the end of the previous period, marking a substantial increase[55] - The group issued new bank acceptance notes amounting to RMB 7.9 million after the balance sheet date, indicating continued access to bank financing[64] Market and Operational Insights - The company plans to enhance its R&D capabilities to optimize product mix and improve production efficiency[35] - The company aims to manage costs and risks due to rising raw material costs while expanding its market share in the decorative printing materials industry[35] - The group anticipates sufficient sales orders in the coming months to enhance its working capital situation, leading to positive operating cash flow[63] - The group has no irrevocable operating lease commitments as of the reporting date, indicating a flexible financial position[70] Employee and Management Information - The group employed 330 staff as of June 30, 2019, up from 316 employees as of December 31, 2018[23] - The remuneration for key management personnel increased to RMB 1,197,000 from RMB 1,116,000 in the previous period[114] - The company has not granted any share options since the adoption of the share option scheme in June 2017[119] Corporate Governance - The company has complied with all corporate governance code provisions except for the separation of the roles of Chairman and CEO, which are held by Mr. Sheng[139] - The audit committee, consisting of three independent non-executive directors, oversees the company's financial reporting and internal control systems[140] - The interim consolidated results for the six months ended June 30, 2019, were reviewed by the audit committee and deemed to comply with applicable accounting standards[141]

Financial Performance - For the three months ended March 31, 2019, the revenue was approximately RMB 63.1 million, a decrease of about 9.2% compared to the same period in 2018[7]. - The gross profit for the same period was approximately RMB 11.6 million, down about 13.0% year-on-year[7]. - The loss attributable to the owners of the company for the three months ended March 31, 2019, was approximately RMB 0.3 million, compared to a profit of approximately RMB 0.8 million for the same period in 2018[7]. - The basic loss per share for the period was approximately RMB 0.07, while the basic earnings per share for the same period in 2018 was approximately RMB 0.16[7]. - The gross profit margin for the period was 18.3%, a slight decrease from 19.1% for the same period in 2018[12]. - The operating profit decreased significantly to RMB 0.3 million compared to RMB 1.0 million in the previous year, indicating a decline in operational efficiency[27]. - The total comprehensive loss for the period was RMB 0.4 million, compared to a comprehensive income of RMB 0.8 million in the previous year[29]. - The company reported a net loss attributable to owners of RMB (345,000), compared to a profit of RMB 788,000 in Q1 2018[51]. - Basic and diluted loss per share was RMB (0.07), compared to earnings of RMB 0.16 per share in the previous year[51]. - Other income showed a net loss of RMB (568,000) compared to a profit of RMB 600,000 in Q1 2018[45]. Cost Management - The sales cost decreased from approximately RMB 56.2 million for the three months ended March 31, 2018, to approximately RMB 51.6 million, a reduction of about 8.2%[11]. - Administrative expenses for the period were approximately RMB 7.3 million, down about 18.9% from RMB 9.0 million for the same period in 2018[16]. - Financial expenses increased by approximately RMB 0.3 million or 60% to about RMB 0.8 million due to increased interest expenses from bank borrowings[18]. - The company aims to manage rising raw material costs by improving production efficiency and reducing costs to enhance profit margins[25]. Business Strategy and Market Outlook - New production lines are being implemented to increase capacity and provide better production flexibility to meet specific customer requirements[25]. - The company is optimistic about gaining market share in the decorative printing materials industry due to its strong reputation and increasing customer preference for manufacturers with design capabilities and stable production quality[25]. - The company plans to continue exploring new markets and seizing emerging opportunities to support future business expansion[25]. Shareholder Information - The company did not recommend any interim dividend for the three months ended March 31, 2019[7]. - Major shareholders include Mr. Sheng with 47.99% and Mr. Yu with 2.25% of the total shares[58]. - As of March 31, 2019, Bright Commerce holds 239,950,000 shares, representing a 47.99% equity stake in the company[62]. - Mr. Ren Yunan owns 81,300,000 shares, which accounts for 16.26% of the company's equity[62]. - The company has not established any arrangements for directors to acquire shares or debt securities during the reporting period[66]. Corporate Governance - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited consolidated results for the period[72]. - The company confirms compliance with the corporate governance code, except for the separation of the roles of chairman and CEO[70]. - The company has adopted trading guidelines for directors in accordance with GEM Listing Rules[69]. - No shareholders or directors have reported any interests in competing businesses as of March 31, 2019[66]. - The company is committed to high standards of corporate governance to protect shareholder interests[69]. - The audit committee's main responsibilities include reviewing financial reporting procedures and internal control systems[72]. - The company has not disclosed any other interests or positions held by directors or major executives in related companies[67].

Financial Performance - The company's revenue for the fiscal year 2018 increased to RMB 349.4 million, representing a growth of 9.2% from RMB 320.1 million in 2017[9]. - The net profit attributable to the company's owners for 2018 was approximately RMB 13.7 million, a significant increase of 96.1% compared to RMB 7.0 million in 2017[9]. - The company's earnings before tax for 2018 was RMB 15.0 million, compared to RMB 8.2 million in 2017, reflecting an increase of 82.8%[9]. - The gross profit margin decreased to 20.2% in 2018 from 22.6% in 2017, primarily due to rising procurement costs of key raw materials[9]. - The company's net profit attributable to shareholders was approximately RMB 13.7 million, representing a year-on-year increase of about 95.7%[33]. - The group recorded a net foreign exchange gain of approximately RMB 1.6 million for the year, compared to a net loss of approximately RMB 1.8 million in 2017[39]. - The company reported a reserve of approximately RMB 111.2 million as of December 31, 2018, compared to RMB 110.2 million in 2017[93]. Assets and Liabilities - Total assets as of December 31, 2018, were RMB 234.9 million, up 9.9% from RMB 213.7 million in 2017[9]. - The total bank borrowings as of December 31, 2018, amounted to approximately RMB 110.8 million, an increase of about 8.5% from RMB 102.1 million in the previous year[35]. - The net current liabilities of the group as of December 31, 2018, were approximately RMB 590 million, with RMB 1,108 million and RMB 576 million being current bank borrowings and bank acceptance notes payable, respectively, due within the next twelve months[174]. Operational Efficiency - Inventory turnover days decreased to 57.4 days in 2018 from 59.9 days in 2017, showing improved inventory management[9]. - Trade receivables turnover days increased to 90.7 days in 2018 from 78.6 days in 2017, indicating a longer collection period[9]. - Trade payables turnover days decreased to approximately 71.3 days from 77.2 days in 2017, with trade payables decreasing to approximately RMB 48.7 million from RMB 60.3 million in 2017[38]. - Employee costs amounted to approximately RMB 38.3 million, down from RMB 39.5 million in 2017, with a total of 316 employees as of December 31, 2018[41]. Market Performance - The sales growth in the Chinese market was a key driver for revenue increase, although it was partially offset by a decline in sales in the Pakistani market[15]. - Sales of melamine-impregnated paper grew by approximately 31.1% to about RMB 123.8 million, driven by strong demand from large Chinese furniture manufacturers[23]. - The sales of PVC furniture film and PVC flooring film increased by approximately 26.0% and 46.0% respectively, indicating rapid growth in these product categories[23]. Future Outlook - The company anticipates an increase in procurement costs for major raw materials, particularly for paper and PVC film, which may impact future profitability[15]. - The company plans to expand its production technology and sales network to tap into new markets, particularly overseas, to maintain its market position[16]. - The demand for decorative paper is expected to further increase, especially as developing countries gradually open up their construction and decoration markets[16]. - The company remains cautiously optimistic about future business development despite facing numerous uncertainties and risks in the global economic environment[56]. Corporate Governance - The independent non-executive directors have extensive experience in accounting and financial management, contributing to the company's governance and strategic oversight[66]. - The company has been actively involved in compliance and regulatory oversight since 2009, ensuring adherence to industry standards and practices[65]. - The board consists of four executive directors and three independent non-executive directors, responsible for corporate policy, business strategy, and risk management[138]. - The company has established a remuneration committee to provide recommendations on the compensation packages of individual executive directors and senior management[150]. - The board is committed to enhancing corporate governance standards to maintain investor confidence and increase shareholder returns[136]. Compliance and Risk Management - The company has established compliance procedures to ensure adherence to applicable environmental laws and regulations[82]. - The Audit Committee reviewed the group's financial reporting processes and internal controls, holding four meetings during the year[168]. - The board has reviewed the effectiveness of the internal control and risk management systems, covering financial, operational, compliance procedures, and risk management functions[176]. - The independent auditor's report confirms that the consolidated financial statements fairly present the group's financial position as of December 31, 2018[193]. Shareholder Information - The company did not recommend the payment of a final dividend for the year[87]. - The company has confirmed that at least 25% of its issued shares are held by the public[127]. - The company has adopted a dividend policy aimed at balancing shareholder expectations with prudent capital management, with the dividend payout ratio to be determined by the board[167]. - The board will review the dividend policy periodically to ensure it aligns with the company's financial performance and market conditions[167].