The global economy has been stable in the past year. Benefitting from the relatively stable exchange rate of the Renminbi, the rising global oil price and the proven strategies to enhance product quality and expand its customer base, both selling price and quantity of the Group’s products improved and turnover of three major businesses also recorded growth.
Among the Group’s three major businesses, the plastics trading business has achieved the strongest performance. With the success of the Group’s effort to adjust its sales strategy, its cooperation with world-renowned fast food restaurant chains has become progressively more mature. In addition to domestic sales, its products are now exported to ASEAN countries. As a result, the Group has secured considerably more bulk orders when compared with last year. The Group will continue to further implement the current cooperation model in order to actively prospect for other renowned brands and expand its customer base, hoping to promote this mature operation model to other customers. Besides, the Group has paid close attention to the raw material supply of new energy electric vehicles and the fact that the market is looking for low petroleum consumption and low emission features in traditional internal combustion engine-powered automobiles. As the market prefers to use turbo engines with smaller capacity and shows a stronger demand for high heat-resistant and heat-insulating function plastic materials, the Group will strive to capture the opportunities arising from related market growth. Apart from serving traditional home appliance producers, the Group also provides necessary raw materials to a new generation of Internet of Things (“IoT”) household product developers in order to create new income sources.
As for the engineering plastic business targeting the Hong Kong local market and the export market in Europe, the Group has implemented measures to broaden income sources and reduce expenditure and invest more resources in Research and Development (“R&D”). Shipments in this business segment continued to increase, resulting in rise in turnover and gross profit margin maintained stable. Considerable orders were received as the Group’s environmentally-friendly foldable household items and high-end brands for infant toys have been well-received by branded customers . The Group’s Shanghai and Dongguan branches reported the most satisfactory performance. With the completion of optimisation of the production facilities and commencement of operation, the Group’s production capacity and product quality have been enhanced as it further realises its strengths in production technologies and R&D and bolsters its overall profitability.
Regarding the colorants, pigments and compounded plastic resin business segment, due to the keen competition in the food packaging market and the impact from the consumer electronic product cycle, gross profit margin was lower than last year. The Group also recorded a one-off additional expense item generated from the relocation of plants in Xiamen, the absence of the reversal of the impairment of deposit for acquisition of properties recorded last year and the rising of labour, administration and logistics costs during the year, meant that profit before taxation declined. To enhance the overall business performance and mitigate potentially adverse effects arising from the external economic environment, the Group has strategically strengthened its cooperation with renowned automobile brands in China in order to capture a larger market share there. In addition, Shanghai branch will continue to manufacture automobile-related products while Xiamen branch will continue manufacture high quality sanitary products and provide value-added services. With the aim of exploring more business prospects in China, the Group hopes to open up new income sources and find new customers.
HUI Sai Chung