Interim Report 2022

Hop Fung Group Holdings Limited Interim Report 2022 34 MANAGEMENT DISCUSSION AND ANALYSIS (continued) BUSINESS REVIEW (continued) I n add i t i on t o u s i ng t he Gr oup ’s e x i s t i ng containerboard inventory, the Group has been purchasing some containerboard overseas for supplying our downstream business for the production of corrugated paper boards and carton boxes. The payment of containerboard imports was settled in US dollars, but the Group’s revenue was mainly generated from domestic sales denominated in Renminbi. Fluctuations in the Renminbi exchange rate have as a result put pressure on the Group. The significant decline in the Renminbi exchange rate in the first half of 2022 substantially negatively impacted the Group’s profitability. With the continued weak demand in Mainland China as a result of the city closure measures arising from the COVID-19 pandemic in China in the first half of the year, the Group’s total sales volume and average selling prices decreased in the first half of 2022. Coupled with the impact of the temporary suspension of production of the Group’s upstream business, revenue in the first half of 2022 fell by 41.0% as compared to the first half of 2021. Among which, revenue from the corrugated packaging business fell by 21.7% as compared to the first half of 2021. As a result of all these factors and the inability to fully pass on high raw material costs to customers, the Group recorded a loss in the first half of 2022. The Group’s inventory level and trade receivables at the end of June 2022 also decreased as a result of the decline in total sales volume and the temporary suspension of production of the upstream business. As the Group has sufficient working capital, its gearing ratio remained at very low levels at the end of June 2022, with the net cash (total bank balances and cash exceeding total bank borrowings), and the bad debt ratio was close to zero, which presents a strong financial position of the Group. 管理層討論及分析 （續） 業務回顧 （續） 除了使用集團現存的箱板紙存貨外，集 團也會在國外採購部分箱板紙，供應給 集團之下游業務製造瓦楞紙板及紙箱， 而箱板紙以美元結算，但集團主要收入 來自人民幣的內銷業務，因此人民幣匯 率的波動對集團構成一定的壓力。而人 民幣匯率於二零二二年上半年大幅下 跌，對集團之盈利造成不少負面影響。 隨著上半年中國新冠疫情引致的城市封 控措施，以致中國內地需求持續疲弱， 集團於二零二二年上半年總銷售量及平 均銷售價格均錄得下跌，加上受到集團 上游業務暫時停產事件影響，二零二二 年上半年之收益比二零二一年上半年下 跌 41.0% 。當中瓦楞包裝業務的收益相 比二零二一年上半年下跌 21.7% 。基於 以上各種原因，以及高企的原材料成本 未能完全轉嫁予客戶，故集團於二零 二二年上半年錄得虧損。 受到總銷售量下跌及上游業務暫時停產 影響，集團於二零二二年六月底之存貨 量及貿易應收款項也相應減少。集團營 運資金充裕，於二零二二年六月底集團 負債比率仍然處於極低的水平，以及淨 現金（銀行結餘及現金總額高於銀行借 貸總額）的情況，而壞賬率也接近零， 財務狀況非常穩健。