Various business segments of the Group experienced many challenges during the Year. For our Manufacturing and Sales Business, the export markets remained tough while the import of the United States (the “US”) declined by double-digits during the Year. Meanwhile, the economy of the People Republic of China (the “PRC”) also failed to meet expectations and has been sluggish. Our customers have adopted a more prudent procurement strategy after the Covid-19 pandemic. At the same time, the global supply chain faced multiple challenges in the Year due to the Ukraine war and geopolitical issues, which caused an increase in logistic costs and changed the procurement strategy of our customers. The rapid increase in US interest rate has affected the global market significantly and increased the cost of capital of the Group.

For our Property Development Business, the industrial real estate market has also been deeply affected in the Year alongside the general real estate market. As the PRC’s manufacturing industry stabilizes, demand for our industrial park is slowly picking up. The lowered PRC interest rate also has a positive impact on the overall finance costs of this business.

For our Music and Entertainment Business, as the global economy, including Hong Kong, has entered a new post-Covid-19 pandemic phase, the entertainment industry slowly picked up during the Year. However, the sluggish economy continued to impact the overall show market in the world.

Looking ahead, in response to the requests from our customers and all the challenges faced by the Group, the Group has adopted a series of restructuring measures since the Year to improve our efficiency and resilience against the fast changing market. These measures will continue to be intensified in the Year 2024. We will also focus on the sustainability of the Company through diversification and dedication to our core businesses. Furthermore, the Group will continue to extend our supply chain to better serve the changing demands of our customers and to strengthen our network to ensure a stable and sustainable supply to our customers.

To tackle the numerous challenges facing the global economy, such as geopolitics issues, conflict among countries and the increase in interest rate, the Group will continue to proceed with a conservative approach and continue to concentrate on the perfection of our technical and management skills.

On behalf of the Board, I would like to take this opportunity to express my sincerest gratitude to all shareholders, investors, business partners and all employees for their continuous support and dedication to the Group throughout the Year amidst the unprecedented challenges and difficulties we encountered. We will continue to strive for excellence in everything we do, while maintaining our focus on developing value to our customers and shareholders.

SUEK Ka Lun, Ernie
Chairman

Hong Kong
22 March 2024