The Group has experienced many challenges under the undesired economic and business environment during the Year. High level of inventories accumulated by our customers and tightened anti-pandemic precaution measures adopted by the Government of the People’s Republic of China (the “PRC”) have seriously affected the revenue and profit margin of business segments of the Group to different extents, especially the manufacturing and sales business, trading business and property development business.

Despite these challenges in the Year, the Group has taken decisive actions to manage our operating costs and to improve our operational efficiency of various business segments. These actions were gradually reflected in our manufacturing and sales business and the overall costs of this business was decreased during the Year. Furthermore, the Group also reviewed our business strategies and explored business opportunities in different directions to expand our market shares of different business segments for the coming years.

For our property development business in the Qingyuan City, the PRC, the Group has devoted more resources in promoting the image of 中星•廣清智谷, the first industrial park developed by the Group, and delivering high-quality products and services to our potential customers. As at the date of this report, approximately 32% of the total gross floor area of the first phase of development of 中星•廣清智谷 was sold. It was really encouraging to be able to achieve such results during this difficult year.

Looking ahead, in response to the requests from our customers and to diversify the risks arising from the political and economics tensions between the PRC and other countries, the Group is actively exploring and developing its business potentials in other countries, of which South East Asia and South America may be our target to further develop. The Group will also devote more sales and marketing resources to further expand our customers base in U.S., Europe and the PRC by recruiting more salespersons or agents in overseas.

As most of the epidemic prevention measures and travel restrictions among countries have been relaxed, the Group is looking for more opportunities to organize or invest in shows and concerts in Hong Kong and for co-operations with more talents and artistes to widen the revenue stream of the music and entertainment business. For the property development business, the Group will continue to put more efforts in the sales and marketing of the industrial buildings and may, if appropriate, consider commencing the construction plan of the second phase of development of 中星•廣清智谷. Furthermore, the Group will continue to look for potential property development projects in Hong Kong and the PRC.

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 notwithstanding 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
27 March 2023