In 2024/2025, the global political and economic environment remained complex and uncertain, with sluggish external end-market demand prevailing. U.S. tariff policy remained unclear, disrupting the global supply chain structure. This, plus the weak market consumption sentiment, made customers more cautious about placing orders, exerting sustained pressure on the overall operation of the industry. Facing market challenges and industry competition, the Group upheld its prudent business philosophy, continued to optimise its product portfolio, refine clientele structure, seized policy opportunities and advanced diversified layout to navigate the ebbs and flows of the fluctuating market. The Group’s total turnover increased against last year.

During the year under review, the Group’s overall gross profit increased with gross profit margin up slightly. In addition, leveraging its precise operational strategies, the Group recorded profit before income tax for the year, achieving a turnaround from loss to gain, with operating performance continuing to improve.

Regarding the plastic raw material trading business, the Group actively seized opportunities presented by favorable national policies, leveraging government subsidy programs for industries such as automobiles and home appliances to significantly improve the efficiency of domestic demand turnover, driving expansion in order volume. Despite the dual impacts of sluggish plastic material prices and tariff fluctuations, the Group’s sales team was able to drive steady sales growth through strict cost control, cost reduction and efficiency improvement, as well as enhanced market penetration and active expansion of new customer sources, thus achieving an increase in turnover for the business, with gross profit margin widened. Benefiting from profit potential unleashed, loss before taxation narrowed.

During the year, despite the challenges from saturation of domestic production capacity and rising internal production costs, the colorants, pigments and compounded plastic resins business showed strong resilience. Government subsidy policy for the automotive industry also bolstered growth momentum of the business, and the Group capitalised on the policy tailwinds to deepen strategic synergy with customers in the automotive application industry. Traditional businesses, such as food packaging, remained stable and continued to provide solid support to the business. At the same time, by expanding domestic sales channels, the Group successfully maintained its overall production scale in Shanghai and Dongguan, effectively alleviating operating pressure from external market volatility. During the year, turnover of the colorants, pigments and compounded plastic resins business decreased slightly as compared to that in the same period last year, with gross profit margin also comparable to the same period last year.

The engineering plastic products business is closely tied to the export market sentiment in Europe and the United States. Affected by tariff policy shocks, some customers tightened ordering strategies, creating periodic pressure on engineering plastic order volumes. In view of that, the Group adopted refined cost control and worked to stabilise its domestic customer base while expanding the overseas one. During the year, the business recorded a decrease in turnover, with gross profit margin increased, and profit before taxation up. The Group believes that once the tariff policy becomes stable, the business is expected to further improve operational efficiency by capitalising on its existing cost advantages and customer base.

 

HUI Sai Chung
Chairman