Economic Performance - In the six months ending September 30, 2022, China's GDP growth rates were 0.4% and 3.9% for the second and third quarters, respectively, compared to 7.9% and 4.9% in the same periods of 2021[11]. - The total retail sales of consumer goods in China for the first nine months of 2022 grew by 0.7% year-on-year, reaching approximately RMB 32,031 billion, with online retail sales increasing by 4.0% to about RMB 9,588.4 billion[11]. - The profit of large paper and paper product manufacturers in China decreased by approximately 42.0% year-on-year in the first three quarters of 2022, highlighting the operational pressures faced by the industry[12]. - The exchange rate of RMB to USD reached a new low since 2011 at RMB 7.0998 per USD on September 30, 2022, compared to RMB 6.4854 per USD on September 30, 2021[12]. Company Performance - The company's revenue decreased by approximately 24.3% to about HKD 476,900,000 compared to HKD 630,100,000 in the same period last year[16]. - The gross profit for the period was approximately HKD 80,500,000, a decrease of about 2.4% from HKD 82,500,000 in the previous year, while the overall gross margin increased to approximately 16.9% from 13.1%[17]. - The company recorded a net loss of approximately HKD 8,400,000, an improvement from a net loss of HKD 9,100,000 in the same period last year[18]. - The total comprehensive loss for the period was HKD 51,092,000, compared to a loss of HKD 2,349,000 in the previous year, showing a significant increase in losses[84]. Operational Challenges - Increased logistics costs due to global supply chain tensions and inflation have pressured the profitability of paper packaging manufacturers[12]. - The retail trade in the domestic market was negatively impacted by COVID-19 control measures, yet the company continues to seize significant opportunities in the market[14]. - The company is committed to providing high-quality packaging products and value-added services to sustain orders from loyal customers despite the challenging economic environment[23]. Financial Management - The group recorded other losses of approximately HKD 1,800,000 compared to other income of HKD 6,500,000 in the previous year, mainly due to fair value losses on investment properties[35]. - Sales expenses decreased to approximately HKD 41,800,000 from HKD 46,600,000 year-on-year, while administrative expenses reduced to approximately HKD 46,800,000 from HKD 61,700,000, reflecting enhanced internal controls and risk management[33]. - The cash conversion cycle increased to 100 days from 80 days year-on-year[40]. - The group had unutilized bank financing of approximately HKD 766,000,000 to ensure future cash flow[42]. Strategic Initiatives - The company aims to diversify its customer base while continuing to expand strategically in the domestic market[14]. - The company plans to enhance resource integration and optimize capacity allocation to expand and diversify its customer base in response to market changes[18]. - The group aims to focus resources on developing the domestic paper packaging production business to maintain stable growth amid challenging market conditions[52]. - The group emphasizes a diversified procurement strategy to maintain a flexible and cost-effective supply of raw materials from both domestic and overseas suppliers[52]. Human Resources - As of September 30, 2022, the group employed a total of 1,040 employees, down from 1,174 employees as of March 31, 2022[50]. - Total employee compensation expenses, including director remuneration, amounted to approximately HKD 79.6 million, compared to HKD 103.1 million for the same period last year, reflecting a decrease of about 22.9%[50]. Shareholder Information - Major shareholders include Perfect Group Version Limited, which holds 233,000,000 shares, representing 67.76% of the issued shares[61]. - The CEO and other senior management are considered to have interests in the shares held by Perfect Group, which also amounts to 233,000,000 shares or 67.76%[60]. Tax and Compliance - The group has several subsidiaries in China that qualify for a reduced corporate tax rate of 15% due to their status as high-tech enterprises[135]. - The group has not recognized any tax provisions for the six months ended September 30, 2022, due to ongoing discussions with the tax authority regarding tax assessments[139]. - The group has received estimated tax assessments from the Hong Kong Inland Revenue Department totaling HKD 23,247,000 for the tax years from 2009/10 to 2015/16[160]. Investment and Capital Expenditure - The group had capital expenditures contracted but not yet provided for approximately HKD 7,500,000, an increase from HKD 5,800,000 as of March 31[47]. - The company acquired property, plant, and equipment for approximately HKD 4,678,000 during the reporting period[146]. Market Conditions - The group will adjust its sales and marketing strategies in a timely manner based on the latest market conditions while adhering to strict risk control management[52]. - There are no significant investment plans under the current uncertain economic conditions, but the group will review its investment portfolio as necessary to achieve sustainable profitability[53].
锦胜集团(控股)(00794) - 2023 - 中期财报