Annual Report 2019

CHAIRMAN’S STATEMENT 主席報告 HOP FUNG GROUP HOLDINGS LIMITED 合豐集團控股有限公司 4 On behalf of the board of directors (the “Board” or “Directors”), I am pleased to present the 2019 full year results to the shareholders of Hop Fung Group Holdings Limited (the “Company”, and, including subsidiaries, the “Group” or “we”). The Sino-US trade war continued in 2019 and the US Federal Reserve has been forced to cut interest rates to support the economy. Some manufacturers in China have had to move their production to Southeast Asia. The trade situation remained chaotic and Chinese economic growth notably slowed as a result. Rising prices for imported raw materials have put domestic manufacturing operations in a bind. The Chinese corrugated packaging industry has been going through a great change since the fourth quarter of 2017. The Chinese government has started to restrict waste paper imports and raised import quality requirements. Import volumes for corporates have been reduced by 20 –30% in 2018 and another 30 – 40% in 2019. As China remains a major net exporter, there is an acute shortfall of domestic waste paper supply, and containerboard manufacturers are starved of raw materials, resulting in a decline in production volume and sales across the industry. China’s reduction in purchases of overseas waste paper resulted in high prices for domestic waste paper. However, overseas waste paper supplying overseas rose quickly, and overseas waste paper prices fell substantially below domestic waste paper prices. This reduced the cost of production for overseas containerboard manufacturers, and some domestic companies started to source from overseas suppliers, reducing demand for domestic containerboard and affecting the development of China’s corrugated packaging industry. The Renminbi exchange rates appreciated slightly in the first quarter of 2019, but eased towards the second quarter. The Renminbi exchange rates in the first half of 2019 were substantially below the levels in the first half of 2018. The exchange rates in the second half of 2019 were also lower than the levels in the second half of 2018. This has a significant negative impact on the corrugated packaging industry as most enterprises in the industry focused on domestic sales in Renminbi, but raw materials sourced overseas are in US dollars, with volatility in the Renminbi exchange rates putting pressure on enterprises. 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」）的二零一九年度全年業績報 告。 二零一九年中美貿易爭端持續，美國聯儲局需要減 息來支持經濟，而部分中國國內廠商更要遷離中國 到東南亞設廠，貿易局勢非常緊張，中國經濟增長 亦因此明顯放緩，進口之物料價格上漲使國內企業 經營困難。 自二零一七年第四季起，中國之瓦楞包裝業經歷了 巨大的變化。中國政府開始限制廢紙進口量，並提 高其進口品質要求，二零一八年減少企業之廢紙進口 量兩至三成，於二零一九年再進一步減少三至四成。 由於中國始終是出口大國，本土廢紙供應量嚴重不 足，以致箱板紙之製造企業缺乏原材料，業內之生 產量及銷售逐漸下降。 中國減少了向海外採購廢紙，使國內廢紙價高企， 但海外廢紙在海外的供應量大增，海外廢紙價遠比 國內廢紙價低，海外箱板紙製造商的成本下降，部 分國內企業因而轉向海外供應商採購，引致國內箱 板紙需求下降，影響了中國之瓦楞包裝業發展。 人民幣匯率於二零一九年第一季輕微上升，但於第 二季便開始續漸回落，二零一九年上半年對比二零一 八年上半年匯率更是大幅下跌，二零一九年下半年對 比二零一八年下半年匯率也是下跌，這對瓦楞包裝 業有一定的負面影響，原因是大多數企業都以內銷 為主，即以人民幣結算，但向國外採購原材料一般 以美元結算，所以人民幣匯率的波動對企業構成一 定的壓力。