Annual Report 2019

MANAGEMENT DISCUSSION AND ANALYSIS 管理層討論及分析 HOP FUNG GROUP HOLDINGS LIMITED 合豐集團控股有限公司 6 BUSINESS REVIEW Chinese economic growth slowed down in 2019 and demand for corrugated packaging declined. Although the Group’s overall sales volume was flat, average selling prices fell, resulting in a 16.1% fall in revenue for the year. The revenue in first half of 2019 fell by 6.6% compared to the first half of 2018. The revenue in second half of 2019 were flat compared to the first half of 2019, but fell by 23.9% compared to the second half of 2018. The Group’s upstream containerboard business produces corrugating medium and linerboard primarily for our downstream corrugated packaging business (making corrugated paper boards and carton boxes). Some upstream products are sold directly to customers, depending on market conditions. The upstream and downstream businesses accounted for 48% and 52% of revenue, respectively. Upstream revenue rose by 3.6% even though average selling prices fell, with equipment utilization at around 55%. Downstream revenue fell by 28.7%, primarily due to a decline in average selling prices, with equipment utilization at around 52%. The Group’s main raw material, waste paper, is sourced from both domestic and overseas sources, and average prices fell by around 20% from 2018 levels. Due to the raw materials shortage, the Group’s equipment utilization fell. Even though the Group has consistently strived to tightly control costs and expenses, some overhead costs remain and the operational deleverage from reduced selling prices ultimately resulted in the Group recording a loss for the year. 業務回顧 於二零一九年中國經濟增長放緩，市場對瓦楞包裝 的需求下降，儘管集團的總體銷售量平穩，平均銷 售價格卻下調，全年收益下跌 16.1% 。二零一九年上 半年之收益比二零一八年上半年下跌 6.6% ，二零一九 年下半年收益與上半年收益相約，對比二零一八年 下半年收益則下跌 23.9% 。 集團上游箱板紙業務生產之瓦楞芯紙及牛咭，主要 提供予集團下游的瓦楞包裝業務（製造瓦楞紙板及紙 箱），另因應市場需求變化而直接售予客戶。上下游 業務分別佔收益的 48% 及 52% ，雖然平均銷售價下 跌，上游之收益上升 3.6% ，設備使用率約 55% ；而下 游之收益下跌 28.7% ，主要是平均銷售價下跌，設備 使用率約 52% 。 集團之主要原材料廢紙分別在國內及海外採購，其 平均價格與二零一八年相比下調約兩成，由於原材料 供應短缺，集團設備使用率低，縱使集團一向嚴謹 監控成本及費用，但始終有一定的經常成本，故未 能跟隨銷售價下跌之幅度而減少，最終集團錄得虧 損。