Financial Performance - Total revenue for the year ended December 31, 2024, was approximately HKD 214.7 million, an increase of about 31.8% compared to HKD 162.9 million in 2023[4] - Gross profit amounted to approximately HKD 33.4 million, with a gross margin of 15.6%, up from 13.3% in 2023[4] - The company reported a loss before tax of HKD 36,349,000, an improvement from a loss of HKD 43,268,000 in the previous year[163] - Net loss attributable to shareholders for the year was HKD 34,950,000, compared to HKD 37,800,000 in 2023, indicating a reduction in losses[163] - Basic and diluted loss per share improved to HKD 5.46 from HKD 5.91 in the previous year[163] - Total assets decreased to HKD 253,770,000 from HKD 284,600,000, reflecting a decline of 10.8%[165] - Current liabilities increased to HKD 77,935,000 from HKD 58,583,000, a rise of 33.1%[165] - The company's cash and cash equivalents decreased to HKD 46,187,000 from HKD 60,740,000, a decline of 23.9%[165] - Non-current liabilities increased to HKD 13,048,000 from HKD 8,928,000, an increase of 46.0%[166] - Total equity attributable to shareholders decreased to HKD 240,722,000 from HKD 275,672,000, a decrease of 12.7%[166] Cash Flow and Liquidity - Cash and cash equivalents decreased from HKD 60.7 million in 2023 to HKD 46.2 million in the current year[5] - As of December 31, 2024, cash and cash equivalents decreased by HKD 14.5 million to HKD 46.2 million, compared to HKD 60.7 million in 2023, primarily due to operational and marketing needs[13] - Cash flow from operating activities showed a net outflow of HKD 9,717,000 for 2024, compared to HKD 14,452,000 in 2023, indicating a 32% improvement[169] - The company’s cash and cash equivalents decreased to HKD 46,187,000 at the end of 2024 from HKD 60,740,000 at the end of 2023, a decline of approximately 24%[170] Debt and Equity - The debt-to-equity ratio increased from 11.8% in 2023 to 16.0% in the current year, primarily due to new low-interest borrowings from a bank in mainland China[5] - The capital-to-debt ratio as of December 31, 2024, was 16.0%, up from 11.8% in 2023, calculated based on total borrowings and total equity[16] - As of December 31, 2024, bank borrowings were approximately HKD 30.8 million, compared to HKD 29.0 million in 2023, with available bank financing of HKD 71.7 million[15] Production and Operations - The company is expanding production capacity in Vietnam and plans to establish a comprehensive vertical production line to meet the needs of brand owners adopting the "China Plus One" strategy[8] - Two advanced dyeing and finishing machines have been installed and are fully operational, expected to significantly enhance production capacity for high-demand denim products[9] - The main business of the group is the manufacturing and sale of denim fabric[33] - The company is committed to developing sustainable denim products using certified recycled materials and organic cotton yarns to align with market trends[10] Market Strategy - The company aims to diversify its customer base and reduce reliance on a single market by expanding its presence in Europe through new partnerships[10] - Management remains cautiously optimistic about future performance, anticipating significant growth in the U.S. market starting in 2025[8] Governance and Compliance - The board does not recommend the payment of a final dividend for the year[37] - The board has developed and reviewed corporate governance policies, including compliance with legal and regulatory requirements[109] - The company has confirmed compliance with the non-competition agreement by its controlling shareholders[90] - The independent auditor's report confirms that the consolidated financial statements fairly present the financial position of the group as of December 31, 2024, in accordance with Hong Kong Financial Reporting Standards[147] Shareholder Information - Wan Fung Investment holds 480,000,000 shares, representing a 75% equity interest in the company[54] - The board members Liu, Dong Wei Ting, and Dong Zhuo Ming each hold 100% beneficial ownership of their shares in Wan Fung Investment[51] - The company has not made any arrangements to waive or agree to waive any dividends for the year[38] - Shareholders holding at least 10% of voting rights can request the board to convene a special general meeting[141] Audit and Financial Reporting - The board report has been audited by Ernst & Young and reviewed by the audit committee[31] - The audit committee reviewed the audited consolidated financial statements for the year ending December 31, 2023, and the unaudited interim financial statements for the six months ending June 30, 2024[123] - The external auditor, Ernst & Young, received a fee of HKD 1,250,000 for audit services and HKD 468,000 for non-audit services during the year[134] Environmental and Social Responsibility - The company is committed to improving environmental performance by reducing wastewater pollutants and carbon emissions while maintaining production capacity[83] - The group reported a charitable donation of approximately HKD 221,000 for the year[39] Future Outlook - The group has no specific plans for significant investments or capital assets for the upcoming year as of December 31, 2024[91] - The board will review the dividend policy periodically and may update it as deemed appropriate[137]
兴纺控股(01968) - 2024 - 年度财报