Hop Fung Group Holdings Limited released its audited results for the year ended 31 December 2025, showing continued operational pressure in its corrugated packaging business.

Revenue and Profitability • Revenue fell 37.90% year-on-year to HK$131.45 million as customer orders declined. • Gross profit slipped to HK$9.94 million, with gross margin narrowing to 7.6% (2024: 8.4%). • Loss attributable to shareholders narrowed to HK$89.74 million from HK$95.23 million in 2024, aided by lower professional fees and headcount reduction. • Excluding a HK$14.10 million impairment charge, EBITDA loss improved to HK$21.90 million (2024: loss of HK$27.90 million).

Cost Structure • Cost of sales dropped 37.25% to HK$121.51 million, reflecting reduced containerboard purchases after the suspension of the Group’s own upstream facilities. • Administrative expenses contracted 36.81% to HK$24.55 million; selling and distribution costs decreased 38.06% to HK$7.86 million. • Finance costs eased to HK$3.20 million (-11.86% YoY).

Balance Sheet and Liquidity • Net borrowings widened to HK$81.30 million (2024: HK$58.20 million) as cash fell to HK$11.42 million and total bank debt remained broadly flat at HK$92.82 million. • Gearing rose to 14.0% (2024: 12.7%), while net gearing climbed to 12.3% (2024: 8.0%). • The Group moved to net current liabilities of HK$58.07 million from net current assets of HK$9.93 million a year earlier, pushing the current ratio down to 0.47.

Auditor’s Qualified Opinion & Going-Concern Risk ZHONGHUI ANDA CPA Limited issued a qualified opinion, citing insufficient evidence over potential tax liabilities linked to PRC VAT invoices. The auditor also highlighted material uncertainty regarding the Group’s ability to continue as a going concern due to consecutive losses, net current liabilities and unresolved contingent tax exposures. Management is relying on bank facility intentions of up to RMB300 million and internal cash-flow measures to address liquidity needs.

Operational Notes • Upstream containerboard production has been suspended since October 2021 pending conversion from coal-fired to gas-fired boilers; no containerboard revenue was recorded in 2024 or 2025. • Workforce was reduced to 187 employees (-18.34% YoY). • No dividend was declared for 2025.

Outlook Management anticipates a challenging market environment amid weak demand and higher costs but expects vertical-integration benefits once upstream operations resume. The Group will focus on pricing discipline, cost control, and efficiency improvements while monitoring the outcome of ongoing tax disputes.