Annual Report 2021

04 HOP FUNG GROUP HOLDINGS LIMITED • Annual Report 2021 CHAIRMAN’S STATEMENT 主 席 報 告 On behalf of the board of directors (the “Board” or “Directors”), I am pleased to present the 2021 full year results to the shareholders of Hop Fung Group Holdings Limited (the “Company”, and, including subsidiaries, the “Group” or “we”). In 2021, the global epidemic situation is still volatile. In the face of the threat of new COVID-19 variants, although the pandemic situation is under control in China, there are still occasional fluctuations. As a result, China’s economic growth has slowed down, resulting in unstable market demand for corrugated packaging. In addition, since 2021, the Chinese government has completely prohibited the import of waste paper, resulting in a tight supply of raw materials. The shortage of domestic waste paper has led to high prices, and the prices of other raw materials and commodities have risen. The overall costs remained high, causing a heavy burden on corrugated packaging companies. The revenue of the Group’s corrugated packaging business relies mainly on Chinese domestic sales. Since the first half of 2021, the demand in China has rebounded due to the stabilization of the epidemic, resulting in an increase in the Group’s revenue in the first half of the year compared to the same period last year. However, the repeated development of epidemic still dampened the market demand, coupled with the impact of upstream business event, the Group’s revenue declined in the second half of 2021. Entering in October, due to the consideration of the environmental policies by the local government, the annual boiler licence review for the Group’s upstream business was suspended, that led to the temporary suspension of the Group’s upstream production operation. The above reason caused the Group’s total sales to drop significantly in 2021. In addition, the fourth quarter is traditionally the peak season for the corrugated packaging business. The production suspension has increased the burden on the Group. At present, the coordination between the Group and the local government is still in progress, and an announcement will be made in due course when the final plan is implemented. The Group has sufficient inventories of containerboard paper and will purchase from third party suppliers in a timely manner to meet its production needs, which has no impact on other production businesses. 本人謹代表董事會（「董事會」或「董事」）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」）的二零二一年度全 年業績報告。 二零二一年，全球疫情依然反覆，面對新冠 變種病毒威脅，雖然國內疫情受控，仍偶有 反覆，中國經濟增長亦因此放緩，以致市場 對瓦楞包裝的需求不穩。加上自二零二一年 起，中國政府全面禁止廢紙進口，以致原材 料供應緊張，國內廢紙供不應求令價格高 企，其他原材料及商品價格上漲，整體成本 居高不下，對瓦楞包裝企業造成沉重的負擔。 本集團的瓦楞包裝業務收益主要來自中國內 銷，於二零二一年上半年開始，中國的需求 隨疫情回穩有所回升，令集團上半年之收益 比去年同期上升。然而，疫情反覆發展仍抑 制市場需求，加上受累上游業務事件，使集 團於二零二一年下半年收益下跌。 踏入十月份，集團的上游業務因當地政府環 境政策的考慮，暫停有關鍋爐的牌照年審事 宜，以致集團的上游業務需暫時停產。上述 原因令集團於二零二一年的總銷售大幅下 跌，加上第四季傳統上是瓦楞包裝業務旺 季，是次停產加重集團的負擔。現時集團與 當地政府的協調仍在進行中，當落實最終方 案會適時公告。集團現存有足夠的箱板紙存 貨及會適時向第三方供應購買以滿足其生產 需求，對其他生產業務沒有帶來影響。