On behalf of the board of directors (the “Board” or “Directors”), I am pleased to present the 2024 full year results to the shareholders of Hop Fung Group Holdings Limited (the “Company”, and, including subsidiaries, the “Group” or “we”).

In 2024, various market uncertainties and challenges such as global-geo-political tension and slowdown of China’s economy affecting sales in the packaging paper industry to a certain extent. Meanwhile, the tense supply and demand in global paper pulp and the tightening in environmental regulations posing the notable upward pressure on containerboard prices, further added the supply pressure, putting the packaging paper industry under stress.

The revenue of the Group’s corrugated packaging business relies mainly on Chinese domestic sales. With sluggish post-pandemic economic recovery in Mainland China and shrinking domestic demand in the corrugated paper industry, the Group’s revenue kept declining compared with year 2023.

Since October 2021, due to the consideration of the environmental policies by the local government, the Group’s upstream containerboard business has been temporarily suspended. Currently, the Group strives to communicate with the local government to speed up the annual inspection procedures of the licenses for the coal-fuel boilers. Meanwhile, the Group is coordinating with local government for the project to change its boilers from coal-fuel boilers to gas-fuel boilers. At the same time, in order to ensure stable supply of containerboard for the Group’s downstream corrugated packaging business, the Group purchases containerboard from third party suppliers.

The Group recorded a loss in 2024, compared to alleviated loss in 2023 due to (i) the decrease in procurement cost; (ii) the decrease in impairment loss on the deposit paid for the acquisition of property, plant and machinery; (iii) the decrease in depreciation expenses and (iv) the decrease in the number of staffs. The Group has taken effort to maintain a roster of quality clients and strengthen the credit control management. As a result, the Group continued with its track record of close to “zero” bad or doubtful debts.

During the year, given the notable upward pressure on containerboard prices, geopolitical tension and fierce market competition, the Directors decided to postpone the process of installing a pulp production line at the manufacturing plant in the Philippines.

Looking forward, we expect the business environment of the corrugated packaging industry remained challenging with tensing geo-political relationship and sluggish global and domestic demand in post-pandemic era. However, the Group will maintain good capital management, in order to have greater flexibility to cope with market volatility and seize opportunities to further enhance the operational efficiency for its long-term sustainable development.

Lastly, I would like to take this opportunity to thank our management team and staff, express my gratitude for their solidarity in facing adversities and various challenges, and thank our customers, suppliers, bankers and investors for their support over the years. We will continue to strive to deliver better returns to our shareholders.

Hui Sum Ping
Chairman

31st March, 2025