Annual Report 2020

HOP FUNG GROUP HOLDINGS LIMITED 合豐集團控股有限公司 4 CHAIRMAN’S STATEMENT 主席報告 On behalf of the board of directors (the “Board” or “Directors”), I am pleased to present the 2020 full year results to the shareholders of Hop Fung Group Holdings Limited (the “Company”, and, including subsidiaries, the “Group” or “we”). The coronavirus pandemic swept the world in 2020, with pandemic prevention measures restricting economic and consumption activities. A downtrodden global economy saw numerous redundancies and corporate closures. Although many countries adopted interest rate cuts and quantitative easing policies to provide support, economic recoveries are still in fits and starts as the pandemic refuses to budge. China’s pandemic outbreak brought industrial production to a virtual halt in the first quarter of 2020, but the situation was rapidly brought under control, and by the end of the first quarter, production had resumed to a great extent across the nation and the economy started recover. That said, the rest of the world fared worse in this pandemic, and Sino-US trade relations stayed tense, resulting in slower growth for the Chinese economy in 2020 compared to previous years. The Group’s corrugated packaging business relies mainly on Chinese domestic sales. The first half of 2020 saw a collapse in domestic demand as well as a lack of raw materials due to Chinese government restrictions on imports of waste paper. As a result, the Group’s revenue fell substantially in the first half of 2020 compared to the first half of 2019. In the second half of 2020, the Chinese economy gradually returned to normal, and market demand for corrugated packaging rose sharply, resulting in revenue growth for the Group in the period. As the Group’s revenue are mainly in Renminbi, but purchases of raw materials are in USD, fluctuations in the Renminbi exchange rate have an impact on the Group’s profitability. The Renminbi exchange rate steadily declined in the first half of 2020 but started to rebound in the third quarter and appreciated substantially in the fourth quarter. Such fluctuations in exchange rates had a positive impact on the Group’s performance. Putting all these together, the Group recorded a loss in the first half of 2020 but rebounded to a profit in the second half of 2020, ending the full year of 2020 at a slight profit. The Group has consistently focused on containerboard and corrugated packaging products with short production cycles and maintains a roster of quality clients. Thus, the Group continues with its track record of next to no bad debts. At the end of 2020, the Group’s balance sheet was at a net cash position (with total bank balances and cash exceeding total bank borrowings), maintaining our consistently robust financial position. 本人謹代表董事會欣然向各位股東提呈合豐集團控股有限 公司（「本公司」，連同其附屬公司，統稱「本集團」、「集 團」或「我們」）的二零二零年度全年業績報告。 於二零二零年，新冠肺炎的疫情擴散全球，各國為了防範 疫情，不時推出限制措施，令經濟及消費疲弱；部分企業 更大幅裁員，甚至結業，全球經濟受到重創。雖然多國都 以減息及量化寬鬆政策來救市，但疫情反覆，使經濟復甦 仍處於起點。 在二零二零年首季，中國疫情非常嚴峻，各地停工停產。 幸而疫情防控措施很快便取得顯著成效，於季末全國大致 上已復工復產，經濟逐漸復甦。但礙於環球疫情嚴重，而 中美貿易關係仍然緊張，以致中國於二零二零年之經濟增 長比往年少。 本集團的瓦楞包裝業務收益主要來自中國內銷，於二零二 零年上半年，中國的需求大跌，加上中國政府限制廢紙進 口量，使集團缺乏原材料，集團上半年之收益比去年同期 大幅下跌。於二零二零年下半年，中國經濟活動回復正 常，市場對瓦楞包裝需求大升，使集團下半年之收益也攀 升。 由於集團之收益主要以人民幣結算，但向國外採購原材料 卻以美元結算，因此人民幣匯率的波動對集團的盈利構成 一定的壓力。人民幣匯率於二零二零年上半年持續下跌， 但於第三季逐漸回升，於第四季更大幅上升，此匯率波動 為集團帶來了正面的影響。 集團受到以上因素影響，於二零二零年上半年錄得虧損， 卻於二零二零年下半年錄得盈利，總結全年集團最終錄得 微利。而集團一直專注生產週期較短的箱板紙及瓦楞包裝 產品，並擁有優質的客戶群，一如以往，集團壞賬率近乎 零，在年底時更錄得淨現金狀況（總銀行結餘及現金高於 總銀行借貸），集團的財務狀況維持在非常穩健的水平。