Financial Information

Latest Results Announcement

Condensed Interim Financial Information For the Six Months and Financial Year Ended 31 December 2024

Condensed Consolidated Statement Of Profit Or Loss For The Six Months And Financial Year Ended 31 December 2024

Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income For The Six Months And Financial Year Ended 31 December 2024

Condensed Statements Of Financial Position At 31 December 2024

Review of Performance

Profit and Loss

Revenue

The Group’s overall revenue increased by HK$358.1 million or 32.2%, from HK$1,113.2 million in FY 2023 to HK$1,471.3 million in FY 2024. The increase in revenue was mainly due to the increased orders of some customers arising from macroeconomic recovery and the commencement of plush toy production in Indonesia.

Gross profit and gross profit margin

In FY 2024, the Group’s gross profit increased by 19.7% or HK$25.3 million, generating gross profit margin of 10.5% (FY 2023: 11.5%). This decrease in gross profit margin was mainly due to the increased proportion of eco-friendly raw materials and labor cost for business expansion.

Other Income

The Group’s other income increased by 39.1% or HK$14.1 million, from HK$36.1 million in FY 2023 to HK$50.2 million in FY 2024. This was mainly due to the gain on disposal of Dongguan Shenshan factory, which net off by the decrease in the reversal of allowance for inventories, decrease in the reduced mould income and decrease in lease modification under IFRS 16.

Selling and distribution expenses

The Group’s selling and distribution expenses increased by 141.4% or HK$17.3 million, from HK$12.3 million in FY 2023 to HK$29.6 million in FY 2024. This was mainly due to the increased sale commission expenses, transportation fee and import & export fees which are the consequence of revenue increase recognised and variations in the destinations of product distribution.

Administrative expenses

The Group’s administrative expenses increased by 11.6% or HK$8.6 million, from HK$74.2 million in FY 2023 to HK$82.8 million in FY 2024. This was mainly due to corporate management fee paid to Mayuanda Investment (HK) Co., Ltd. for plush toys production management, consultancy fee, recruitment cost and increased travel to Indonesia in FY2024 by personnel involved in the expansion of manufacturing operations there.

Finance Costs

Finance costs increased by 6.4% or HK$1.9 million, from HK$29.3 million in FY 2023 to HK$31.2 million in FY 2024, mainly due to increased interest rate and the increase of bank borrowings in FY 2024.

Income Tax Expenses

Income tax expense increased 133.9% or HK$8.5 million, from HK$6.3 million in FY 2023 to HK$14.8 million in FY 2024. This was mainly due to the tax jurisdiction for the demolition compensation income being in the mainland, where the tax rate of 25% is higher than the tax rate of 16.5% in Hong Kong.

Balance Sheet

Non-current assets

The Group’s non-current assets stood at HK$609.7 million as at 31 December 2024, increased by 8.6% or HK$48.2 million, from HK$561.5 million at 31 December 2023. This was due to an increase in deposit paid for lands, construction and equipment of HK$71.8 million in Indonesia, HK$3.2 million in Dongguan, equipment and workshop development of HK$6.2 million in Heyuan. Additionally, an increase in new property, plant and equipment and right-of-use assets of HK$120.3 million for manufacturing operations, which were partially offset by total depreciation, disposal and exchange difference of HK$153.3 million.

Current assets

The Group’s current assets stood at HK$1,001.8 million as at 31 December 2024, an increase of HK$132.3 million or 15.2%, from HK$869.5 million as at 31 December 2023, mainly due to:

  • an increase in contract assets of HK$151.6 million;
  • an increase in inventories of HK$50.4 million; and
  • an increase in prepayments, deposits and other receivables of HK$21.1 million;

which were partially offset by:

  • a decrease in trade and bills receivables of HK$44.2 million;
  • a decrease in bank and cash balances of HK$23.8 million; and
  • a decrease in financial assets at FVTPL of HK$22.8 million.
Current liabilities

The Group’s current liabilities stood at HK$842.2 million at 31 December 2024, increased by HK$200.8 million or 31.3%, from HK$641.4 million at 31 December 2023, mainly due to:

  • an increase in short-term borrowings of HK$116.4 million to finance working capital requirements;
  • an increase in trade and bills payables of HK$65.0 million;
  • an increase in accruals and other payables of HK$15.9 million;
  • an increase in current tax liabilities of HK$0.9 million;
  • an increase in lease liabilities of HK$1.5 million; and
  • an increase in deferred consideration payable of HK$1.1 million
Non-current liabilities

The Group’s non-current liabilities stood at HK$19.5 million as at 31 December 2024, a decrease of HK$24.0 million or 55.2%, from HK$43.5 million as at 31 December 2023 mainly due to decreases in lease liabilities of HK$15.0 million and long-term borrowings of HK$9.0 million.

Cash Flow Analysis

As at 31 December 2024, the Group’s cash resources of HK$102.6 million are considered adequate for current operational needs. The net decrease in cash and cash equivalents of HK$21.8 million held by the Group comprised:

  • Net cash generated from operating activities of HK$58.5 million to finance the working capital needs;
  • Net cash used in investing activities of HK$153.6 million mainly due to additions of deposit paid for new lands in Indonesia and property, plant and equipment; and
  • Net cash generated from financing activities of HK$73.3 million, mainly due to the borrowed of loans.

Commentary

In 2024, the Group delivered double-digit revenue growth and made significant strides in its strategic expansion initiatives, reinforcing the resilience and agility of its business model. This strong performance reflects a customer centric approach, emphasizing quality management, operational excellence, and sustainable material application. To maintain its growth momentum, the Group remains focused on strengthening customer relationships, driving innovation, and leveraging advanced technologies to enhance operational capabilities.

The Group’s expansion into the plush toy segment in Indonesia has been a key driver of growth, increasing order volumes and diversifying its customer base. Additionally, ongoing discussion with potential global customers continue to enhance the Group’s long-term growth prospects and market resilience.

To support its Indonesia expansion, the Group had upgraded its manufacturing infrastructure, converting a warehouse into spraying workshops and installing over 450 automated decoration machines to optimize production efficiency. The construction of two new warehouse, totaling over 15,000 square meters, further strengthens operational capacity and scalability. Additionally, the Group has secured leasehold land of approximately 41,000 square meters to establish die-casting production, with operations scheduled to commence in Q4 2025, nearly doubling plush toy production capacity.

The Group’s commitment to sustainability continues to be a core differentiator and growth enabler. In 2024, it exceeded its green manufacturing target, achieving over 40% green product output. Building on this success, the Group has set an ambitious 2025 goal - targeting over 65% of its products to utilize sustainable materials. This continued focus on sustainability into its core operations, the Group is well-positioned to drive long-term value creation and industry leadership.

Despite macroeconomic uncertainties, including geopolitical tensions and prolonged interest rate pressures, the Group remains proactive and resilient. With the investments in China and Indonesia and increased workforce, the Group will invariably face expansion related inefficiencies. To address these challenges, the Group continues to allocate resources and management focus toward enhancing productivity, improving quality, and mitigating inefficiencies as arise. By fortifying supply chain partnerships and optimizing operational efficiencies, the Group continues to mitigate potential disruptions while maintaining agility in a dynamic market. At the same time, close monitoring of market conditions and strategic risk management ensure that the Group remains well-prepared to navigate challenges and capitalize on emerging opportunities.

With ongoing expansion initiatives, infrastructure enhancements, and a strong commitment to sustainability, the Group is well-positioned to accelerate growth, enhance manufacturing efficiencies, and strengthen its market presence. Through disciplined capital management, strategic innovation, and an unwavering focus on sustainability, the Group is poised to deliver sustained value creation and long-term returns for shareholders.