锦胜集团(控股)(00794) - 2025 - 年度业绩

Group Performance Overview This section provides an overview of the group's financial performance, including key statements and financial positions Consolidated Statement of Profit or Loss For the year ended March 31, 2025, the Group successfully turned a net loss into a net profit of 2,602 thousand HKD, compared to a net loss of 15,818 thousand HKD in the prior year, with revenue slightly decreasing by 0.5% to 760,436 thousand HKD but improved gross profit and gross profit margin | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 760,436 | 764,520 | (4,084) | -0.53 | | Cost of Sales | (618,379) | (632,781) | 14,402 | -2.28 | | Gross Profit | 142,057 | 131,739 | 10,318 | 7.83 | | Other Income | 13,479 | 2,896 | 10,583 | 365.43 | | Other Gains and Losses | 2,218 | 24,476 | (22,258) | -90.94 | | Selling Expenses | (56,539) | (59,066) | 2,527 | -4.28 | | Administrative Expenses | (69,980) | (77,082) | 7,102 | -9.21 | | Other Operating Expenses | (14,037) | (9,903) | (4,134) | 41.74 | | Finance Costs | (21,430) | (27,708) | 6,278 | -22.66 | | Share of Results of Associates | (1,498) | – | (1,498) | - | | Loss Before Tax | (5,730) | (14,648) | 8,918 | -60.88 | | Income Tax Credit (Expense) | 8,332 | (1,170) | 9,502 | -812.14 | | Profit (Loss) for the Year | 2,602 | (15,818) | 18,420 | -116.45 | | Profit (Loss) for the Year Attributable to Owners of the Company | 2,252 | (15,839) | 18,091 | -114.21 | | Basic and Diluted Earnings (Loss) Per Share (HK cents) | 0.68 | (4.78) | 5.46 | -114.23 | Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's total comprehensive expense for the year significantly decreased from 20,834 thousand HKD in 2024 to 4,482 thousand HKD in 2025, primarily due to improved exchange differences and the elimination of last year's revaluation surplus impact | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit (Loss) for the Year | 2,602 | (15,818) | 18,420 | -116.45 | | Exchange Differences Arising from Translation of Foreign Operations | (7,415) | (13,031) | 5,616 | -43.10 | | Revaluation Surplus on Prepaid Land Lease Payments and Property, Plant and Equipment Transferred to Investment Properties | – | 8,616 | (8,616) | -100.00 | | Fair Value Gains (Losses) on Financial Assets at Fair Value Through Other Comprehensive Income | 219 | (601) | 820 | -136.44 | | Other Comprehensive Expense for the Year, Net of Tax | (7,084) | (5,016) | (2,068) | 41.23 | | Total Comprehensive Expense for the Year | (4,482) | (20,834) | 16,352 | -78.40 | | Total Comprehensive Expense for the Year Attributable to Owners of the Company | (4,820) | (20,860) | 16,040 | -76.89 | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets slightly decreased, but net current assets significantly improved from 52,829 thousand HKD in 2024 to 77,853 thousand HKD, primarily due to a reduction in current liabilities | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | | | | | | Total Non-current Assets | 588,728 | 653,670 | (64,942) | -9.93 | | Current Assets | | | | | | Inventories | 41,655 | 50,813 | (9,158) | -18.02 | | Trade and Bills Receivables | 235,678 | 218,892 | 16,786 | 7.67 | | Bank and Cash Balances | 87,718 | 101,657 | (13,939) | -13.71 | | Total Current Assets | 417,920 | 443,497 | (25,577) | -5.77 | | Current Liabilities | | | | | | Trade and Bills Payables | 189,407 | 218,001 | (28,594) | -13.12 | | Short-term Bank Borrowings | 87,153 | 69,885 | 17,268 | 24.71 | | Tax Payables | 191 | 20,291 | (20,100) | -99.06 | | Total Current Liabilities | 340,067 | 390,668 | (50,601) | -12.95 | | Net Current Assets | 77,853 | 52,829 | 25,024 | 47.37 | | Net Assets | 511,146 | 515,628 | (4,482) | -0.87 | | Total Equity | 511,146 | 515,628 | (4,482) | -0.87 | Notes to the Consolidated Financial Statements This section details the accounting policies, revenue recognition, segment information, and other financial notes supporting the consolidated financial statements Application of New and Revised Hong Kong Financial Reporting Standards The Group first applied several new and revised HKFRSs effective this year, which had no significant impact on current or prior period financial position and performance, and future standards are not expected to have a material effect - This year, several new and revised Hong Kong Financial Reporting Standards and amendments were first applied, including sale and leaseback, classification of current or non-current liabilities, non-current liabilities with covenants, and supplier finance arrangements[6] - These new standards and amendments had no significant impact on the Group's financial position and performance for the current and prior years[6] - Revised HKFRSs issued but not yet effective are not expected to have a significant impact on the consolidated financial statements in the foreseeable future[7] Revenue and Segment Information The Group's revenue primarily derives from sales of corrugated products, offset-printed corrugated products, and property leasing, with total revenue of 760,436 thousand HKD in 2025, mainly from corrugated products, and significant growth in property leasing revenue, while segment assets and liabilities decreased - The Group's revenue comprises revenue from sales of goods and rental income from investment properties[9] - The Group has three reportable operating segments: corrugated products, offset-printed corrugated products, and property leasing[11] Segment Revenue and Results (2025) | Segment | External Sales (thousand HKD) | Total Rental Income (thousand HKD) | Segment Results (thousand HKD) | | :--- | :--- | :--- | :--- | | Corrugated Products | 533,606 | – | 15,149 | | Offset-Printed Corrugated Products | 215,240 | – | 10,959 | | Property Leasing | – | 11,590 | 1,768 | | Total | 748,846 | 11,590 | 27,876 | Segment Revenue and Results (2024) | Segment | External Sales (thousand HKD) | Total Rental Income (thousand HKD) | Segment Results (thousand HKD) | | :--- | :--- | :--- | :--- | | Corrugated Products | 572,329 | – | (1,337) | | Offset-Printed Corrugated Products | 185,870 | – | 2,460 | | Property Leasing | – | 6,321 | 30,168 | | Total | 758,199 | 6,321 | 31,291 | Segment Assets and Liabilities (2025) | Segment | Segment Assets (thousand HKD) | Segment Liabilities (thousand HKD) | | :--- | :--- | :--- | | Corrugated Products | 463,707 | 278,758 | | Offset-Printed Corrugated Products | 173,996 | 90,283 | | Property Leasing | 345,693 | 3,972 | | Total Reportable Segments | 983,396 | 373,013 | Segment Assets and Liabilities (2024) | Segment | Segment Assets (thousand HKD) | Segment Liabilities (thousand HKD) | | :--- | :--- | :--- | | Corrugated Products | 531,945 | 343,957 | | Offset-Printed Corrugated Products | 185,579 | 96,064 | | Property Leasing | 348,947 | 4,587 | | Total Reportable Segments | 1,066,471 | 444,608 | Other Segment Information (Depreciation and Amortization) | Year | Corrugated Products (thousand HKD) | Offset-Printed Corrugated Products (thousand HKD) | Property Leasing (thousand HKD) | Unallocated (thousand HKD) | Total (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | 2025 | 14,055 | 15,365 | – | 659 | 30,079 | | 2024 | 21,132 | 15,825 | – | 822 | 37,779 | Geographical Information (Revenue and Non-current Assets) | Region | 2025 Revenue (thousand HKD) | 2024 Revenue (thousand HKD) | 2025 Non-current Assets (thousand HKD) | 2024 Non-current Assets (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 97,254 | 100,820 | 241,097 | 244,045 | | Macau | – | 331 | – | – | | Mainland China (excluding Hong Kong and Macau) | 663,182 | 663,369 | 336,000 | 397,994 | | Consolidated Total | 760,436 | 764,520 | 577,097 | 642,039 | - In 2025, Customer A contributed 76,276 thousand HKD in revenue, accounting for over 10% of total revenue, primarily from corrugated products[23] Other Income Other income significantly increased to 13,479 thousand HKD in 2025, primarily driven by relocation compensation, refund of value-added tax, and rent concessions | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Dividend Income from Equity Securities at Fair Value Through Profit or Loss | 138 | 117 | 21 | 17.95 | | Government Grants | 895 | 1,264 | (369) | -29.20 | | Relocation Compensation | 3,123 | – | 3,123 | - | | Bank Interest Income | 656 | 191 | 465 | 243.46 | | Refund of Value Added Tax | 4,260 | – | 4,260 | - | | Other Rental Income from Leased Property, Plant and Equipment | 858 | 417 | 441 | 105.76 | | Rent Concession | 1,894 | – | 1,894 | - | | Miscellaneous Income | 1,655 | 907 | 748 | 82.47 | | Total | 13,479 | 2,896 | 10,583 | 365.43 | Other Gains and Losses Total other gains and losses for 2025 amounted to 2,218 thousand HKD, a significant decrease from 24,476 thousand HKD in 2024, primarily due to a shift from fair value gains to losses on investment properties, despite gains from early lease termination and exchange | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Exchange Gains (Losses) | 2,152 | (495) | 2,647 | -534.75 | | Fair Value Changes on Equity Securities at Fair Value Through Profit or Loss | 488 | (218) | 706 | -323.85 | | Fair Value Changes on Investment Properties | (4,684) | 24,872 | (29,556) | -118.83 | | Gain on Early Termination of Lease | 3,873 | – | 3,873 | - | | Financial Product Income | 389 | 317 | 72 | 22.71 | | Total | 2,218 | 24,476 | (22,258) | -90.94 | Other Operating Expenses Other operating expenses increased to 14,037 thousand HKD in 2025, primarily due to losses on disposal and write-off of property, plant and equipment, write-off of trade receivables, and increased staff severance costs | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss on Disposal of Property, Plant and Equipment | 4,115 | 5,037 | (922) | -18.30 | | Write-off of Property, Plant and Equipment | 2,230 | 344 | 1,886 | 548.26 | | Write-off of Trade Receivables | 480 | – | 480 | - | | Staff Severance Costs | 6,424 | 4,322 | 2,102 | 48.63 | | Others | 788 | 200 | 588 | 294.00 | | Total | 14,037 | 9,903 | 4,134 | 41.74 | Finance Costs Finance costs significantly decreased to 21,430 thousand HKD in 2025, primarily due to reductions in both interest on bank borrowings and interest on lease liabilities | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on Bank Borrowings | 6,654 | 10,465 | (3,811) | -36.42 | | Interest on Lease Liabilities | 14,776 | 17,243 | (2,467) | -14.31 | | Total | 21,430 | 27,708 | (6,278) | -22.66 | Income Tax (Credit) Expense The Group recorded an income tax credit of 8,332 thousand HKD in 2025, compared to an expense of 1,170 thousand HKD in 2024, primarily due to a 18,973 thousand HKD reversal of overprovision for PRC Enterprise Income Tax in prior years, offsetting underprovision for Hong Kong Profits Tax | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong Profits Tax - Current Tax | 551 | 527 | 24 | 4.55 | | Hong Kong Profits Tax - Underprovision in Prior Years | 10,046 | 729 | 9,317 | 1278.05 | | PRC Enterprise Income Tax - Current Tax | 44 | 26 | 18 | 69.23 | | PRC Enterprise Income Tax - Overprovision in Prior Years | (18,973) | (112) | (18,861) | 16840.18 | | Total | (8,332) | 1,170 | (9,502) | -812.14 | - Hong Kong Profits Tax is calculated at 16.5%, with qualifying entities taxed at 8.25% for the first 2,000,000 HKD[25] - PRC subsidiaries are subject to Enterprise Income Tax at 25%, with high-tech enterprises enjoying a preferential rate of 15% and small low-profit enterprises a 20% preferential rate[26][27] - Due to the finalization of tax assessments by the Inland Revenue Department, there was an underprovision of Hong Kong Profits Tax of approximately 10,821 thousand HKD for the current year; concurrently, a review of PRC subsidiary tax provisions led to a reversal of overprovision from prior years of approximately 18,973 thousand HKD[29] Profit (Loss) for the Year The Group achieved a net profit in 2025, primarily benefiting from reduced total depreciation and amortization, increased rental income from investment properties, and gains from evacuation compensation and exchange | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Depreciation and Amortization | 30,079 | 37,779 | (7,700) | -20.38 | | Total Rental Income from Investment Properties | (11,590) | (6,321) | (5,269) | 83.36 | | Cost of Inventories Recognized as Expense | 617,260 | 632,489 | (15,229) | -2.41 | | Auditor's Remuneration | 1,000 | 1,200 | (200) | -16.67 | | Evacuation Compensation | (3,123) | – | (3,123) | - | | Redundancy Costs | 6,424 | 4,322 | 2,102 | 48.63 | | Loss on Disposal of Property, Plant and Equipment | 4,115 | 5,037 | (922) | -18.30 | | Net Exchange Gains (Losses) | (2,152) | 495 | (2,647) | -534.75 | | Write-off of Property, Plant and Equipment | 2,230 | 344 | 1,886 | 548.26 | Dividends The Board of Directors does not recommend paying a final dividend for the year ended March 31, 2025, consistent with the prior year - The Board of Directors does not recommend paying a final dividend for the year ended March 31, 2025 (2024: nil)[30] Earnings (Loss) Per Share Basic and diluted earnings per share for 2025 were 0.68 HK cents, successfully reversing the 4.78 HK cents loss per share in 2024, primarily due to the positive profit for the year | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit (Loss) for the Year Attributable to Owners of the Company (thousand HKD) | 2,252 | (15,839) | | Weighted Average Number of Ordinary Shares (shares) | 331,084,000 | 331,084,000 | | Basic and Diluted Earnings (Loss) Per Share (HK cents) | 0.68 | (4.78) | - There were no potential dilutive ordinary shares for the calculation of earnings (loss) per share for the years ended March 31, 2025 and 2024[32] Trade and Bills Receivables Total trade and bills receivables increased to 235,678 thousand HKD in 2025, with a slight extension in trade receivables turnover days, while the significant reduction in provision for expected credit losses indicates improved credit risk management | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade Receivables - Not Yet Due | 164,605 | 138,661 | 25,944 | 18.71 | | Trade Receivables - Overdue (1-30 days) | 18,143 | 36,494 | (18,351) | -50.28 | | Trade Receivables - Overdue (31-90 days) | 10,502 | 14,454 | (3,952) | -27.34 | | Trade Receivables - Overdue (91-365 days) | 4,895 | 4,136 | 759 | 18.35 | | Trade Receivables - Overdue (Over 1 year) | 968 | 3,494 | (2,526) | -72.29 | | Provision for Expected Credit Losses | (216) | (3,089) | 2,873 | -93.01 | | Bills Receivables - Not Yet Due | 36,781 | 24,742 | 12,039 | 48.66 | | Total | 235,678 | 218,892 | 16,786 | 7.67 | Movement in Provision for Expected Credit Losses | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | As at April 1 | 3,089 | 3,191 | | Exchange Differences | (31) | (102) | | Bad Debts Written Off | (2,842) | – | | As at March 31 | 216 | 3,089 | - The provision for expected credit losses significantly decreased, primarily due to 2,842 thousand HKD in bad debts written off[36] Trade and Bills Payables Total trade and bills payables decreased to 189,407 thousand HKD in 2025, with bills payables constituting a larger proportion, and the Group's credit period with suppliers ranges from 15 to 90 days | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade Payables (0-30 days) | 65,257 | 65,674 | (417) | -0.64 | | Trade Payables (31-90 days) | 9,903 | 16,161 | (6,258) | -38.72 | | Trade Payables (Over 90 days) | 1,593 | 1,175 | 418 | 35.57 | | Bills Payables | 112,654 | 134,991 | (22,337) | -16.55 | | Total | 189,407 | 218,001 | (28,594) | -13.12 | - The credit period granted by suppliers ranges from 15 to 90 days, and the Group has established financial risk management policies to ensure settlement of payables[37] Management Discussion and Analysis This section provides an in-depth review of the Group's industry, business operations, financial performance, capital structure, and future outlook Industry Review The China paper packaging industry maintained steady growth in FY225, driven by green packaging demand and e-commerce expansion, yet faced challenges from rising paper costs, stricter environmental policies, overcapacity-induced price volatility, and global economic uncertainties impacting exports - China's paper and paper products industry recorded approximately 8.2% growth in 2024, primarily driven by policies prohibiting single-use plastics and the expanding domestic e-commerce market[38] - The industry faces challenges such as rising paper costs, tightening domestic and international environmental policies, and increased costs for technological innovation and emission reduction[38] - Prices for corrugated paper and linerboard remained volatile at low levels due to overall market oversupply, with China's average export price for paper and paperboard decreasing by 13.93% in 2024[38][39] - Total profit for 2024 was RMB 25.8 billion, a 2.71% year-on-year decrease, with industry leaders pursuing innovation-driven development strategies[39] Business Review Facing a challenging business environment, the Group prioritized operational stability, focused on high-value-added printed corrugated paper packaging products, implemented cost controls, strategically adjusted sales structure towards paperboard and semi-finished products, leveraged supplier relationships for supply chain shifts, and integrated factories to enhance efficiency and convert Huizhou factory into an investment property for increased rental income, resulting in a net profit of approximately 2,600 thousand HKD and improved gross profit and gross profit margin for the year - The Group prioritizes operational stability, focusing on providing high-value-added printed corrugated paper packaging products and services, and implementing effective cost control measures[40] - Strategically adjusted the sales structure to focus more on paperboard and semi-finished products, aiming to reduce overall expenses and enhance long-term operating efficiency[41] - Due to government redevelopment plans, the Huizhou factory's production lines were integrated with the Dongguan factory, and the Huizhou factory was converted into an investment property, generating additional rental income[42] - The Group turned a loss into a profit for the year, recording a net profit of approximately 2,600 thousand HKD (2024: net loss of approximately 15,800 thousand HKD)[43] - Revenue slightly decreased by approximately 0.5% to 760,400 thousand HKD, but gross profit and gross profit margin both improved, reaching approximately 142,100 thousand HKD and 18.7% respectively (2024: 131,700 thousand HKD and 17.2%)[43] - Other operating expenses increased to approximately 14,000 thousand HKD, mainly due to redundancy costs and losses from disposal/write-off of properties, but partially offset by relocation compensation and gains from early lease termination[44] - Other income increased to approximately 13,500 thousand HKD, primarily attributable to a refund of value-added tax of approximately 4,300 thousand HKD and rent concessions of approximately 1,900 thousand HKD[44] - Following a review of tax provisions, an overprovision from prior years of approximately 19,000 thousand HKD was reversed, further contributing to the net profit[44] Operating Results The Group's revenue slightly decreased in 2025, but both gross profit margin and net profit margin significantly improved, with fluctuating sales for corrugated and offset-printed corrugated products, substantial growth in property leasing income, and cost control and production integration as key drivers of enhanced profitability Operating Results Overview | Indicator | 2025 (thousand HKD) | 2025 (%) | 2024 (thousand HKD) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Paper Packaging - Mainland China Sales | 657,945 | 87.9 | 663,369 | 87.5 | | Paper Packaging - Domestic Shipment for Export | 51,971 | 6.9 | 56,108 | 7.4 | | Paper Packaging - Direct Export | 38,930 | 5.2 | 38,722 | 5.1 | | Property Investment - Rental Income | 11,590 | – | 6,321 | – | | Total Revenue | 760,436 | – | 764,520 | – | | Gross Profit Margin | – | 18.7 | – | 17.2 | | Net Profit (Loss) Margin | – | 0.3 | – | (2.1) | Revenue The Group's revenue slightly decreased to approximately 760,400 thousand HKD in 2025, primarily due to reduced customer order frequency and a strategic shift in sales mix towards lower-priced paperboard and semi-finished products, despite maintaining overall sales volume - Revenue slightly decreased to approximately 760,400 thousand HKD (2024: approximately 764,500 thousand HKD), mainly due to reduced customer order frequency and a shift in sales mix[46] - The Group allocated resources to the production and sale of paperboard and semi-finished products, enhancing overall sales volume and operational efficiency, but resulting in a decrease in average product unit price[46] - Expanded domestic market presence and diversified customer base, leading to more domestic customer orders and entry into the medical supplies packaging industry[46] Guangdong Operations Guangdong operations remain the Group's core business, focusing on high-value-added paper packaging, with revenue slightly decreasing by 1.2% to approximately 748,800 thousand HKD despite challenging market conditions, achieved through sales product mix adjustments and production integration - The Guangdong factory focuses on high-value-added paper packaging business, including the production of high-quality corrugated paperboard and structurally designed paper packaging products[48] - Revenue from sales of goods slightly decreased by approximately 1.2% from approximately 758,200 thousand HKD in 2024 to approximately 748,800 thousand HKD for the current year[48] - Production integration was carried out during the year to optimize cost allocation and broaden revenue streams[48] Property Investment Following the conversion of the Huizhou factory into an investment property, property leasing income significantly increased by 84.1% to approximately 11,600 thousand HKD, becoming a new revenue growth driver for the Group - After the Huizhou factory was converted into an investment property, it generated rental income for the current year, with property leasing business revenue significantly increasing by approximately 84.1% to approximately 11,600 thousand HKD[49] Gross Profit Despite a decrease in revenue, the Group's gross profit increased to approximately 142,100 thousand HKD, with the gross profit margin rising to 18.7%, attributed to stringent cost control, regional business and production line integration, flexible procurement channels, and additional rental income from the Huizhou factory's conversion to an investment property - Gross profit increased to approximately 142,100 thousand HKD (2024: approximately 131,700 thousand HKD), and the gross profit margin rose from approximately 17.2% to approximately 18.7%[51] - Gross profit growth is primarily attributable to the implementation of stringent cost control measures, integration of regional businesses and production lines, reduction of fixed costs, and flexible procurement channels and efficient inventory management[50] - The conversion of the Huizhou factory into an investment property generated additional rental income, significantly boosting the gross profit of the property investment segment[50] Guangdong Operations (Gross Profit) Gross profit from Guangdong operations increased to approximately 131,600 thousand HKD, with the gross profit margin improving to 17.6%, primarily benefiting from lower sales costs for paperboard and semi-finished packaging products, stringent cost control, and production line integration at the Dongguan factory - Gross profit from Guangdong operations increased to approximately 131,600 thousand HKD (2024: approximately 125,700 thousand HKD), and the gross profit margin improved to approximately 17.6% (2024: approximately 16.6%)[52] - The improvement in gross profit is attributed to lower sales costs for paperboard and semi-finished packaging products, stringent cost control, and the integration of production lines at the Dongguan factory[52] Property Investment (Gross Profit) Following the successful leasing of the Huizhou factory, property leasing gross profit significantly increased to approximately 10,500 thousand HKD, indicating a substantial improvement in the profitability of the property investment segment - Property leasing gross profit significantly increased from approximately 6,000 thousand HKD in 2024 to approximately 10,500 thousand HKD, primarily due to the conversion of the Huizhou factory into an investment property and its successful leasing[53] Other Income Other income for the year significantly increased to approximately 13,500 thousand HKD, primarily due to a refund of value-added tax, rent concessions, and relocation compensation - Other income significantly increased to approximately 13,500 thousand HKD (2024: approximately 2,900 thousand HKD)[54] - Key drivers of this increase include a refund of value-added tax of approximately 4,300 thousand HKD, rent concessions of approximately 1,900 thousand HKD, and relocation compensation of approximately 3,100 thousand HKD[54] Other Gains and Losses Other gains for the year amounted to approximately 2,200 thousand HKD, primarily comprising gains on early lease termination, exchange gains, and fair value gains on trading securities, partially offset by fair value losses on investment properties - Other gains for the year amounted to approximately 2,200 thousand HKD, primarily consisting of gains on early lease termination of approximately 3,900 thousand HKD, exchange gains of approximately 2,200 thousand HKD, and fair value gains on trading securities of approximately 500 thousand HKD[55] - Fair value losses on investment properties of approximately 4,700 thousand HKD partially offset these gains[55] - Other gains in 2024 were approximately 24,500 thousand HKD, mainly from fair value gains on the former Huizhou production base converted into investment properties[55] Selling and Administrative Expenses Selling expenses decreased by 4.4% to approximately 56,500 thousand HKD, and administrative expenses significantly decreased by 9.2% to approximately 70,000 thousand HKD for the year, primarily due to production line integration and stringent internal cost control - Selling expenses decreased by approximately 4.4% to approximately 56,500 thousand HKD, mainly due to the integration of production lines into the Dongguan factory, resulting in a reduction of transportation expenses by approximately 12%[56] - Administrative expenses significantly decreased by approximately 9.2% to approximately 70,000 thousand HKD, attributable to stringent internal cost control and risk management[56] Other Operating Expenses Total other operating expenses for the year amounted to approximately 14,000 thousand HKD, primarily comprising one-off expenses from the disposal and write-off of factory machinery and equipment, and redundancy costs, largely incurred due to evacuation arrangements and production line integration - Total other operating expenses amounted to approximately 14,000 thousand HKD (2024: approximately 9,900 thousand HKD)[57] - This primarily includes one-off expenses of approximately 6,300 thousand HKD arising from the disposal and write-off of factory machinery and equipment, and one-off redundancy costs of approximately 6,400 thousand HKD[57] - These one-off expenses were primarily incurred due to evacuation arrangements and the Group's production line integration[57] Finance Costs Finance costs significantly decreased this year, with interest expenses on bank borrowings reduced to approximately 6,700 thousand HKD and interest expenses on lease liabilities reduced to approximately 14,800 thousand HKD - Interest expenses on bank borrowings significantly decreased to approximately 6,700 thousand HKD for the current year (2024: approximately 10,500 thousand HKD)[58] - Interest expenses on lease liabilities decreased from approximately 17,200 thousand HKD in 2024 to approximately 14,800 thousand HKD[58] Share of Results of Associates To expand market share and seize Southeast Asian opportunities, the Group established an associate in Thailand, which commenced production in December 2024, resulting in a share of loss from associates of approximately 1,400 thousand HKD for the year - The Group participated in establishing an associate company in Thailand during the year to align with the trend of customers shifting their supply chains to Southeast Asia[59] - The associate's factory commenced production in December 2024, resulting in the Group's share of loss of approximately 1,400 thousand HKD for the year[59] Net Profit and Dividends The Group recorded a net profit of approximately 2,600 thousand HKD for the year, successfully turning a loss into profit, with a net profit margin of approximately 0.3%, basic and diluted earnings per share of 0.68 HK cents, and no final dividend recommended by the Board - A net profit of approximately 2,600 thousand HKD was recorded for the year (2024: net loss of approximately 15,800 thousand HKD), with a net profit margin of approximately 0.3% (2024: net loss margin of approximately 2.1%)[60] - The improvement in net profit is primarily attributable to production integration, market expansion, stringent cost control, and a retrospective adjustment of approximately 19,000 thousand HKD for overprovision of taxes in prior years[60] - Basic and diluted earnings per share for the current year were 0.68 HK cents (2024: basic and diluted loss per share of 4.78 HK cents)[60] - The Board of Directors does not recommend paying a final dividend for the current year[60] Capital Structure The Group's current ratio improved to approximately 1.23, primarily due to a reduction in tax payables, while issued share capital remained at 3,310,840 HKD - The current ratio improved to approximately 1.23 for the current year (2024: approximately 1.14), mainly due to a reduction in tax payables[61] - As at March 31, 2025, the Company's issued share capital was 3,310,840 HKD, divided into 331,084,000 shares of 0.01 HKD par value each[61] Working Capital The Group's working capital management efficiency significantly improved, with the cash conversion cycle substantially shortened from 45 days to 16 days, while trade receivables turnover days slightly extended but remained stable, trade payables turnover days significantly lengthened, and inventory turnover days shortened Working Capital Turnover Days | Indicator | 2025 (days) | 2024 (days) | | :--- | :--- | :--- | | Trade and Bills Receivables | 109 | 106 | | Trade and Bills Payables | 120 | 92 | | Inventories | 27 | 31 | | Cash Conversion Cycle | 16 | 45 | - Trade and bills receivables turnover days extended from 106 days to 109 days, but remained within established credit terms[63] - Trade and bills payables turnover days significantly extended to 120 days (2024: 92 days), primarily through the use of bank acceptance bills for payment settlement[63] - Inventory turnover days decreased to 27 days (2024: 31 days), with inventories decreasing by 18.0% from approximately 50,800 thousand HKD to approximately 41,700 thousand HKD[64] - The cash conversion cycle significantly shortened from 45 days to 16 days, indicating a notable improvement in operating efficiency[64] Liquidity and Financial Resources The Group's current ratio remained healthy and improved, while the gearing ratio slightly increased, with ample cash reserves and unutilized bank facilities to support business growth and potential investment opportunities Liquidity and Financial Resources Ratios | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Current Ratio | 1.23 | 1.14 | | Gearing Ratio | 11.5% | 10.5% | - Bank balances and cash amounted to approximately 107,800 thousand HKD (2024: approximately 138,900 thousand HKD), including pledged deposits of approximately 20,100 thousand HKD[66] - Unutilized bank facilities of approximately 320,400 thousand HKD were available[66] - Total outstanding bank borrowings amounted to approximately 115,900 thousand HKD (2024: approximately 114,900 thousand HKD), of which approximately 98,600 thousand HKD is repayable within one year[67] - The gearing ratio was approximately 11.5% (2024: approximately 10.5%), indicating the Group maintained a sound liquidity position[67] Foreign Exchange Risk The Group is exposed to foreign exchange risk and will closely monitor it, considering appropriate hedging measures to mitigate significant risks - The Group is exposed to foreign exchange risk and will closely monitor it, considering appropriate hedging measures to mitigate significant risks when necessary[68] Pledge of Assets As of March 31, 2025, the Group pledged assets with a total net book value of approximately 256,800 thousand HKD as collateral for bank facilities - As at March 31, 2025, the Group pledged certain assets (such as bank deposits, buildings, and investment properties) with a total net book value of approximately 256,800 thousand HKD (2024: approximately 278,000 thousand HKD) as collateral for the Group's bank facilities[69] Capital Commitments As of March 31, 2025, the Group had contracted but unprovided capital expenditure for property, plant and equipment of approximately 300 thousand HKD, with no authorized but uncontracted capital expenditure - As at March 31, 2025, the Group had contracted but unprovided capital expenditure for property, plant and equipment of approximately 300 thousand HKD (2024: approximately 200 thousand HKD)[70] - As at March 31, 2025, the Group had no authorized but uncontracted capital expenditure[70] Contingent Liabilities The Hong Kong Inland Revenue Department's tax assessments were finalized, resulting in an underprovision of Hong Kong Profits Tax of approximately 10,821 thousand HKD, which the Group has paid, and as of March 31, 2025, the Group had no significant contingent liabilities - The Hong Kong Inland Revenue Department finalized tax assessments for the years of assessment 2009/10 to 2017/18, resulting in an underprovision of Hong Kong Profits Tax of approximately 10,821 thousand HKD[71] - The Group has paid part of the amount using tax reserve certificates and the remaining balance in cash[71] - As at March 31, 2025, the Group had no significant contingent liabilities[72] Employees and Remuneration As of March 31, 2025, the Group's employee count decreased to 627, with total staff remuneration expenses of approximately 100,800 thousand HKD, a decrease from the previous year - As at March 31, 2025, the Group employed a total of 627 employees (2024: 785 employees)[73] - Total staff remuneration expenses for the current year amounted to approximately 100,800 thousand HKD (2024: approximately 116,900 thousand HKD)[73] - Remuneration policies are formulated based on individual employee performance and market conditions, offering competitive compensation packages and discretionary bonuses[73] Prospects The Group remains cautiously optimistic about the long-term prospects of the corrugated paper packaging industry, anticipating growth driven by e-commerce recovery and green packaging demand, and will continue to address challenges and seize opportunities through resource integration, domestic and international market expansion, strategic collaborations, and diversified procurement strategies - The recovery of e-commerce demand, the Chinese government's economic stabilization policies, and green packaging principles are expected to drive growth in China's paper packaging industry[74] - The Group will strengthen production and sales balance through resource integration, ensuring a flexible mix and stable supply of domestic and international raw materials[74] - Will leverage its associate company to seize opportunities arising from supply chain shifts to Southeast Asia and actively seek potential strategic collaborations to expand market share[74] - Will continue to integrate resources and production capabilities, allocating more resources to the production of paperboard and semi-finished packaging products to enhance operational efficiency and flexibility[75] - Committed to ensuring safe and environmentally friendly production, utilizing advanced production technologies to consolidate its leading position in China's corrugated paper packaging industry[75] Future Plans for Material Investments and Capital Assets As of the date of this announcement, the Group has no proposed plans for material investments or capital assets - As at March 31, 2025, and the date of this announcement, the Group had no proposed plans for material investments or capital assets[76] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the year - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the current year[77] Corporate Governance This section outlines the Company's commitment to maintaining appropriate corporate governance practices and compliance with listing rules Corporate Governance The Company is committed to maintaining appropriate corporate governance practices to protect shareholders' interests and comply with listing rules, having adhered to the Stock Exchange's Corporate Governance Code provisions for the year - The Board of Directors is committed to maintaining appropriate corporate governance practices to protect shareholders' interests and ensure the Company's compliance with the latest statutory requirements and professional standards[78] - For the current year, the Company has complied with the code provisions set out in Appendix C1 to the Rules Governing the Listing of Securities on the Stock Exchange, the Corporate Governance Code[78] Standard Code for Securities Transactions by Directors The Company has adopted the Standard Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance throughout the year - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[79] - All members of the Board of Directors confirmed their compliance with the required standards set out in the Standard Code throughout the current year[79] Audit Committee The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing financial statements, risk management, and internal control systems, and has reviewed this results announcement and the consolidated financial statements - The primary responsibilities of the Audit Committee include considering the relationship with external auditors, reviewing the Group's financial statements, and overseeing the Group's financial reporting system, risk management, and internal control systems[80] - The Audit Committee comprises three independent non-executive directors: Mr. Law Tsz Lun (Chairman), Ms. Tsui Pui Man, and Mr. Cheung Wang Yip[80] - The Audit Committee has reviewed this results announcement, the Group's audited consolidated financial statements for the current year, and related matters[80] Other Information This section covers changes in directors' information, dividend policy, share registration, post-reporting period events, public float, auditor's scope, and annual report publication Changes in Directors' Information Mr. Chow On Tat Yuen resigned as an independent non-executive director and from several committee positions, with Mr. Cheung Wang Yip appointed to succeed him - Mr. Chow On Tat Yuen resigned as an independent non-executive director, a member of the Audit Committee, Remuneration Committee, and Nomination Committee of the Company[81] - Mr. Cheung Wang Yip has been appointed as an independent non-executive director, a member of the Audit Committee, Remuneration Committee, and Nomination Committee of the Company[81] Dividends The Board of Directors does not recommend paying any final dividend for the current year - The Board of Directors does not recommend paying any final dividend for the current year[82] Closure of Register of Members To determine eligibility for attending the Annual General Meeting, the Company will suspend its register of members from August 28 to September 2, 2025 - To determine the right to attend and vote at the Annual General Meeting, the Company will suspend its register of members from August 28, 2025, to September 2, 2025 (both dates inclusive)[83] - All share transfer documents, together with the relevant share certificates, must be lodged with Tricor Investor Services Limited by 4:30 p.m. on August 27, 2025, at the latest[83] Events After the Reporting Period There have been no significant events after the end of the current year and up to the date of this announcement - There have been no significant events after the end of the current year and up to the date of this announcement[84] Public Float As of March 31, 2025, public shareholders held over 25% of the Company's issued shares - As at March 31, 2025, public shareholders held over 25% of the Company's issued shares[85] Scope of Work of Tianjian International Certified Public Accountants Limited Auditor Tianjian International Certified Public Accountants Limited confirmed that the financial data in this results announcement aligns with the audited consolidated financial statements, but their work does not constitute an assurance engagement - The Group's auditor, Tianjian International Certified Public Accountants Limited, agreed that the data in the Group's consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of profit or loss and other comprehensive income, and their related notes for the current year, as presented in this results announcement, are consistent with the amounts in the Group's audited consolidated financial statements for the current year[86] - The work performed by Tianjian International Certified Public Accountants Limited in this regard does not constitute an assurance engagement, and therefore no assurance is provided on this announcement[86] Publication of Annual Report The Company's annual report will be published on the Company's and the Stock Exchange's websites in due course and will be sent to shareholders upon request - The Company's annual report will be published on the Company's website and the Stock Exchange's website in due course and will be sent to the Company's shareholders upon request[87]