Financial Performance - The profit attributable to owners of the Company amounted to approximately HK$138.6 million for the Reporting Period, representing a decrease of approximately 17.7% compared to the six months ended 30 June 2022[33]. - The overall sales revenue and gross profit for the six months ended 30 June 2023 were HK$1,906.7 million and HK$401.0 million, respectively, representing decreases of 16.3% and 12.1% compared to the same period in 2022[46]. - Basic earnings per share for the six months ended June 30, 2023, was approximately HK$13.33, a decrease of about 17.7% from HK$16.19 for the same period in 2022[73]. - Revenue for the six months ended June 30, 2023, amounted to approximately HK$1,906.7 million, representing a decrease of approximately HK$371.8 million or 16.3% from HK$2,278.5 million for the same period in 2022[57][58]. - Gross profit decreased from approximately HK$456.1 million in the first half of 2022 to approximately HK$401.0 million in the first half of 2023[89]. - Net profit for the six months ended June 30, 2023, amounted to approximately HK$118.7 million, representing a decrease of approximately 29.3% compared to HK$167.9 million for the same period in 2022[125]. - The overall gross profit margin slightly increased by about 1 percentage point to 21.0% during the first half of 2023[46]. - The Group recorded a net profit margin of approximately 6.2% for the six months ended June 30, 2023, a decrease of approximately 1.2 percentage points from approximately 7.4% for the same period in 2022[125]. Revenue Breakdown - Sales revenue from lingerie elastic fabric totaled around HK$528.6 million, a decline of approximately HK$145.4 million or 21.6% compared to the same period in 2022[60]. - Revenue from elastic webbing amounted to approximately HK$387.0 million, indicating a decline of approximately HK$132.3 million or 25.5% compared to the same period in 2022[60]. - For the six months ended June 30, 2023, the Group's sales revenue from sportswear and apparel elastic fabric declined to HK$958.6 million, a decrease of approximately 8.4% from HK$1,046.7 million for the same period in 2022[114]. - Revenue from elastic fabric was HK$1,487.2 million, accounting for 78.0% of total revenue, while revenue from lingerie decreased by 21.6% to HK$528.6 million[85][86]. Liabilities and Equity - As of June 30, 2023, the company reported non-current liabilities of approximately HK$493,048,000, an increase from HK$233,264,000 as of December 31, 2022[22]. - The company's bank and other borrowings rose significantly to HK$367,722,000 from HK$105,515,000, indicating a substantial increase in leverage[22]. - The total equity attributable to owners of the company decreased to HK$3,029,486,000 from HK$3,040,215,000, reflecting a decline in shareholder equity[22]. - The net debt position as of June 30, 2023, was approximately HK$753.2 million, down from HK$941.7 million as of December 31, 2022, resulting in a net gearing ratio of 24.2%[101][104]. - The net asset liability ratio decreased to 24.2% as of June 30, 2023, down from 30.0% as of December 31, 2022[74]. Cash Flow and Expenses - The Company achieved stable net cash generated from operating activities of approximately HK$385.9 million for the six months ended June 30, 2023, compared to approximately HK$274.8 million for the same period in 2022[45]. - Net cash used in investing activities was approximately HK$59.2 million for the six months ended June 30, 2023, down from approximately HK$198.9 million for the same period in 2022[128]. - Finance costs increased by approximately 97.7% to HK$59.1 million for the six months ended June 30, 2023, compared to approximately HK$29.9 million for the same period in 2022[126]. - Selling and distribution expenses represented approximately 4.3% of total revenue for the six months ended June 30, 2023, up from 4.1% in the same period of 2022[93]. - Research and development costs accounted for approximately 2.1% of total revenue for the six months ended June 30, 2023, down from 2.4% in the same period of 2022[93]. Corporate Governance and Shareholder Information - The company has complied with the Corporate Governance Code throughout the six-month period ended June 30, 2023[8]. - The company did not purchase, redeem, or sell any of its listed securities during the six months ended June 30, 2023[17]. - The company has a controlling shareholder, Mr. Lu, who holds approximately 61.59% of the issued share capital[9]. - A total of 637,500,000 ordinary shares are held by Grandview Capital Investment Limited, wholly owned by Mr. Lu Yuguang, who is deemed to be interested in these shares[200]. - The Audit Committee consists of three independent non-executive directors who reviewed the financial statements and internal control procedures[197]. Market Conditions and Future Outlook - The textile and garment sector faced significant challenges due to market uncertainties and high inventories, leading to conservative order placements by international brand customers[42]. - Exports to the U.S. and Europe (excluding Russia) saw declines of 17.9% and 6.8%, respectively, during the first half of 2023 compared to the same period last year[43]. - The global GDP growth forecast for 2023 was downgraded to 2.8%, with a slight improvement expected in 2024 at 3.0%[141]. - The Group expects apparel brand customers to replenish their inventories more actively in the latter half of 2023, indicating a potential increase in demand for apparel products[143]. - The Group's order book is expected to return to a normal level in the coming months, reflecting a slow but steady recovery of the global economy[143]. Operational Efficiency and Capacity - The Group is committed to enhancing operational efficiencies at its overseas manufacturing sites in Vietnam and Sri Lanka, with plans for further capacity addition in Vietnam in the second half of 2023[171][173]. - The Group observed a contraction in sales revenue from elastic fabric sales to sportswear and apparel customers in the first half of 2023, but anticipates a recovery due to strong industry fundamentals[144]. - The capacity utilization of core manufacturing sites is expected to improve as sales orders have recently shown positive trends[147]. - The Group plans to strengthen its innovation and research and development capabilities to meet rising customer demand for innovative sportswear and apparel products[144]. Shareholder Returns - The Company declared an interim dividend of HK5.3 cents per ordinary share for the six months ended 30 June 2023, expected to be paid on 30 November 2023[193]. - A new Share Option Scheme and Share Award Scheme were adopted on June 27, 2023, which took effect on June 29, 2023, following approval from the Stock Exchange[185].
超盈国际控股(02111) - 2023 - 中期财报