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During the year under review, Top Form International Limited (“Top Form” or the “Company”, together with its subsidiaries, the “Group”) recorded a promising growth of 14% in sales revenue to HK$1,281 million from HK$1,126 million in fiscal 2017, despite challenging market conditions and a volatile trade environment.

In terms of our client base, 63% of our sales came from the United States market, 26% came from the Europe, and the rest of the world accounted for the remaining 11%. It is worth noting that we expanded our market share amongst our key customers.

During the period under review, the appreciation of the Thai baht and the Renminbi against US dollars and escalating labor costs, particularly in the second half of the year, continued to add cost pressure to our operating environment which resulted in lower gross profit margin in second half of fiscal 2018 as compared to first half of fiscal 2018. However the gross profit margin remained at 18% during the year under review. In constant currency term, the gross profit margin was 20%.

The Group maintained a consistent manufacturing capacity ratio between its overseas and local plants in China during the year. Production from Thailand and Cambodian plants accounted for 65% of the global output while China accounted for the remaining 35%. We are delighted to observe an overall improvement in efficiency across all our plants.

For the year under review, the Group recorded a net profit after tax of HK$12 million, a 107% increase from HK$6 million in the corresponding year.

Having considered our cash position and upcoming investment needs, the board of directors of the Company (the “Board”) has proposed a final dividend of HK$0.05 per share for the year ended 30 June 2018.

Taking into account that the global economy growth has slowed down, along with supply chain disruptions and the uncertain tariff regime caused by trade conflicts between the US and China, we foresee a challenging market ahead with increasing competition and ongoing cost inflation. The Group will continue to rationalize and optimize the capacity of each production plant, and further raise productivity and efficiency through investment in new technology and process optimization.

To cope with the disruptive changes in the fashion industry, including a demand for more complex products, shorter production lead time, as well as the growing market trends of e-commerce and digitization across the supply chain, the Group recognizes the importance of continuing investments in people and technology to position Top Form as the leading intimate apparel manufacturer of the future.

As part of the Group’s succession planning and leadership transition, the Board has appointed Mr. Wong Kai Chung, Kevin as the Chief Executive Officer of the Group to lead the Group forward and build the next generation leadership team for future sustainable growth. The Board is confident that the new management structure and leadership will guide the Company through the difficult market conditions and volatility in the year ahead.

Mr. Marvin Bienenfeld has informed the Board of his intention to retire as an independent non-executive director of the Company at the conclusion of the annual general meeting of the Company to be held on 31 October 2018 and would not offer himself for re-election. Mr. Bienenfeld has been serving the Board for 20 years, on behalf of the Board, I would like to take this opportunity to express its sincere gratitude to Mr. Bienenfeld for his valuable contributions to the Group during his tenure of office.

Meanwhile, on behalf of the Board, I would like to express our gratitude to our clients and business associates for their continued support, as well as our employees for their dedication and contribution to the Group.



Wong Chung Chong

24 August 2018

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