Chairman's Message

Chairman's Message

In the second half of 2023, substantial changes happened in the global political, economic and energy landscapes. International turmoil was escalating, developed economies rushed to tighten monetary policies and interest rates climbed quickly in the US and Europe, weighing down the mean price of oil, and prices of plastic materials continued to stay low. During the period, although orders increased at the Group continuing to improve product quality and expand customer base, the operating environment remained under pressure due to the decline in plastic material price. The Group recorded a slight increase in total turnover.

During the period under review, the Group’s overall gross profit increased. Continuing to implement stringent cost trimming measures, gross profit margin of the Group widened and loss attributable to equity holders of the Company narrowed significantly.

For the colorant, pigment and compounded plastic resin business, geopolitical issues prompted many overseas customers to return to placing orders in China in the second half of 2023. As a result, the mainland market gradually recovered, production activities improved notably and orders quickly rebounded. The Group seized those opportunities to build a stable customer base covering such sectors as automotive applications, food packaging and new energy. During the period, turnover of the business segment increased together with the increase in gross profit margin, profit before income tax more than doubled.

During the period, engineering plastic business recorded turnover similar to that in the same period in 2022, with a decrease in gross profit margin. Taking into account the one-off special inventory provision for internal operational adjustments made by the Group in response to market changes during the period, a loss before taxation was recorded. Excluding that one-off special inventory provision, the business indeed turned around to profit. The end products of the business include general household appliances such as household products, electrical appliances and high-end kitchenware.

During the period under review, the price of plastic materials dropped alongside plunging international crude oil price. Thus, although overall sales volume increased, turnover of the plastic raw material trading business still dropped, with gross profit margin recording a slight increase. Facing weak consumption sentiment in the market, despite the continuous effort of the sales team to find new customer sources, in the high interest rate environment, financial costs stayed high.


HUI Sai Chung