Basic Information Chairman's Statement
Management Discussion and Analysis Corporate Governance Report
Directors' and Senior Management's Profile Notices (Replacement of Lost Certificates)

First six months of 2013 Year 2012 First six months of 2012 Year 2011

RESULTS

For the first half of 2013, the unaudited consolidated profit attributable to shareholders was HK$76,755,000, representing an increase of 29.2% from HK$59,388,000 for the corresponding period last year. Basic earnings per share was HK8.5 cents, an increase of 30.8% from HK6.5 cents for the corresponding period last year.

INTERIM DIVIDEND

The Board of Directors of the Company (the "Board") declares the payment of an interim dividend for the six months ended 30 June 2013 of HK2.0 cents per share (six months ended 30 June 2012: HK1.5 cents per share).

BUSINESS REVIEW

In the first half of 2013, some major business segments of the Group recorded an increase in profit whilst some recorded a fall in profit. The Group's consolidated turnover was HK$1,837,225,000, representing an increase of HK$164,479,000 or 9.8% from HK$1,672,746,000 for the corresponding period last year. Profit from operations was HK$89,643,000, representing an increase of HK$17,404,000 or 24.1% from HK$72,239,000 for the corresponding period last year.

In respect of our tinplating business, the price of iron and steel products was relatively volatile in the first half of 2013. The excess supply over demand in the iron and steel industry and intense competition placed pressure on the selling price of tinplate products. Through modifying and integrating the sales and marketing capacities of the tinplating plants in northern and southern China, sales volume of tinplate products was increased as compared to that in the corresponding period last year, which created a basis for the Group to leverage from the effect of economies of scale. This in turn mitigated the pressure on the Group regarding the surge in the cost of raw materials and hence increased gross profit. Besides, as a result of the faster appreciation of Renminbi against the Hong Kong Dollar and the United States Dollar, exchange gains for the period increased significantly, which contributed to the significant increase in operating profit of the Group's tinplating business as compared to that in corresponding period last year.

As to the fresh and live foodstuffs business, the price of live pigs went down and hence the turnover of the fresh and live foodstuffs business recorded a decrease. Given the devoted efforts of our operation team and premium quality sources of goods from major suppliers, the Group actively maintained the market supply and the overall market share in the live pigs supply into Hong Kong remained at about 45%. This provided a relatively steady contribution to the earnings of the Group.

In respect of the property leasing business, in common with the increase in the valuation of office units in Hong Kong in the first half of 2013, net valuation gains on investment properties of HK$13,448,000 (2012: HK$16,123,000) were recorded by the Group.

For the associates, as a result of the slight decrease in the raw materials purchase cost of Yellow Dragon Food Industry Co., Ltd., an associate of the Group, its result for the period turned from a loss to a profit. On the other hand, the decrease in the price of live pigs led to operating losses being incurred by the two associates engaged in the pig farming business.

Tinplating

Zhongshan Zhongyue Tinplate Industrial Co., Ltd. ("Zhongyue Tinplate") is a wholly-owned subsidiary of the Company. The Company holds a 66% interest in Zhongyue Posco (Qinhuangdao) Tinplate Industrial Co., Ltd. ("Zhongyue Posco") while the remaining 34% is held by POSCO Co., Ltd., an internationally renowned iron and steel enterprise. Currently, the annual production capacity of tinplate products and blackplates of the Group is 470,000 tonnes and 150,000 tonnes respectively, of which 220,000 tonnes of tinplate products and 150,000 tonnes of blackplates are from Zhongshan's capacity, whereas 250,000 tonnes of tinplate products are from Qinhuangdao's capacity.

In the first half of 2013, the Group produced 200,282 tonnes of tinplate products, which represented an increase of 15.1% as compared to that in the corresponding period last year. Zhongyue Tinplate and Zhongyue Posco produced 112,023 tonnes and 88,259 tonnes respectively. In addition, the blackplate manufacturing plant of Zhongyue Tinplate produced 74,294 tonnes of blackplates, an increase of 7.6% as compared to that in the corresponding period last year, providing a steady supply of raw materials (i.e. blackplates) for its production of tinplate products. The Group's tinplating plants in northern and southern China sold 198,778 tonnes of tinplate products, an increase of 14.6% as compared to that in the corresponding period last year, of which, Zhongyue Tinplate and Zhongyue Posco sold 106,582 tonnes and 92,196 tonnes respectively, an increase of 3.1% and 31.6% respectively as compared to that in the corresponding period last year. Turnover was HK$1,664,145,000, an increase of 11.5% as compared to the corresponding period last year and profit from operations was HK$44,756,000, an increase of HK$17,882,000 or 66.5% as compared to that in the corresponding period last year. The tinplating business accounted for 90.6% and 49.9% of the Group's turnover and profit from operations respectively.

In the first half of 2013, the price of iron and steel products was relatively volatile. The excess supply over demand in the iron and steel industry and intense competition placed pressure on the selling price of tinplate products. From the fourth quarter of 2012 to the first quarter of 2013, the rate of increase in the price of hot-rolled plates, which is one of the major raw materials for the production of blackplates, was greater than the rate of increase in the price of tinplating products. In the second quarter of 2013, the price of hot-rolled plates went down. Through modifying and integrating the sales and marketing capacities of the tinplating plants in northern and southern China, the Group increased its sales to customers in northern China. Sales volume of Zhongyue Posco increased by 31.6% as compared to that in the corresponding period last year, which created a basis for the Group to leverage from the effect of economies of scale. This in turn mitigated the pressure on the Group regarding the surge in the cost of raw materials and hence increased gross profit. Besides, as a result of the faster appreciation of Renminbi against the Hong Kong Dollar and the United States Dollar, exchange gains for the period increased significantly, which contributed to the significant increase in operating profit of the Group's tinplating business as compared to that in corresponding period last year. On the other hand, through the pursuit of more flexible payment methods with its suppliers, the Group successfully increased liquidity of its working capital and bank deposits. Interest income was enhanced accordingly. Sales were also stabilised by capitalising on the favourable position in capital management and adopting effective control in trade receivables management. The Group continued the implementation of full budgetary control, strengthened the internal control and deployed Six Sigma methodology for implementing a substantial number of projects for technological improvements in order to promote energy saving, waste reduction and efficiency optimisation. Furthermore, the Group has committed more resources to scientific and technological R&D initiatives, incubating new strengths for the future development of our tinplating business.

As the tinplating factory in Zhongshan is operating at full capacity, in order to accelerate the transformation and upgrade of our business, the Group re-occupied certain plant in our factory area in Zhongshan, which was previously let out, and proposes to construct a new tinplating production line with an annual production capacity of 150,000 tonnes, together with expansion of the relevant coating and printing production lines, with an estimated investment cost of approximately RMB235 million (equivalent to approximately HK$295 million). These new production lines will enable Zhongyue Tinplate to improve the standard of production equipment and product quality and refine the product mix. It will also facilitate the development of new products and strengthen our core competitiveness. The Group is now preparing to apply to the relevant authorities of the local government for the construction of the project. If all the relevant approvals are obtained, the construction will start in the second half of 2013 and it is expected to commence operation in 2014. By that time, the annual production capacity of tinplate products and blackplates of the Group's factories in northern and southern China will become 620,000 tonnes and 150,000 tonnes respectively.

Fresh and Live Foodstuffs

Guangnan Hong Company Limited ("Guangnan Hong") is a wholly-owned subsidiary of the Company. Guangnan Hong holds a 51% interest in Guangnan Live Pigs Trading Limited, an 18.66% (became 17.72% since July 2013) interest in an associate, Hubei Jinxu Agriculture Development Co., Ltd. ("Hubei Jinxu") and a 34% interest in an associate, Guangdong Zijin Baojin Livestock Co., Ltd. ("Guangdong Baojin").

In the first half of 2013, the turnover of the fresh and live foodstuffs business amounted to HK$159,737,000, representing a decrease of 3.8% as compared to that in the corresponding period last year. Together with the share of losses less profits of two associates, namely Hubei Jinxu and Guangdong Baojin, of HK$2,809,000, the total profit from operations was HK$42,542,000, representing a decrease of HK$9,229,000 or 17.8% as compared to that in the corresponding period last year. The price of live pigs went down and hence the turnover of the fresh and live foodstuffs business recorded a decrease. The decrease in the price of live pigs also led to operating losses being incurred by the two associates engaged in the pig farming business. Through continuous optimisation of the business workflow, the Group proactively strengthened its communication with governmental authorities, suppliers, industry participants and customers. Service standards were enhanced. The Group also actively maintained the market supply. The overall market share in the live pigs supply into Hong Kong was about 45%. This provided a relatively steady contribution to the earnings of the Group.

Property Leasing

The Group's leasing properties mainly include the plant and staff dormitories of Zhongyue Tinplate and Zhongyue Posco and the office units in Hong Kong.

In the first half of 2013, turnover from the property leasing business of the Group was HK$13,343,000, a decrease of 5.2% as compared to that in the corresponding period last year. Profit from operations of leasing properties amounted to HK$8,118,000, a decrease of 8.6% as compared to that in the corresponding period last year. In addition, along with the increase in the valuation of office units in Hong Kong in the first half of 2013, net valuation gains on investment properties of HK$13,448,000 (2012: HK$16,123,000) were recorded by the Group.

Yellow Dragon

The Group holds a 40% interest in Yellow Dragon Food Industry Co., Ltd. ("Yellow Dragon").

In the first half of 2013, Yellow Dragon recorded a sales volume of 210,531 tonnes in its major product, corn starch, representing an increase of 16.5% as compared to that the corresponding period last year. Turnover was HK$1,025,451,000, a decrease of 2.1% as compared to that in the corresponding period last year. As the purchase price of the major raw material, corn, decreased slightly, its result for the period turned from a loss to a profit. A profit attributable to the shareholders of HK$3,361,000 was recorded, as compared to a loss of HK$26,442,000 in the corresponding period last year.

FINANCIAL POSITION

As at 30 June 2013, the Group's total assets and total liabilities amounted to HK$3,219,512,000 and HK$819,581,000, representing an increase of HK$194,697,000 and HK$92,073,000 respectively when compared with the positions at the end of 2012. Net current assets decreased from HK$1,014,167,000 at the end of 2012 to HK$960,206,000. The current ratio (current assets divided by current liabilities) also decreased from 2.9 as at the end of 2012 to 2.2.

Liquidity and Financial Resources

As at 30 June 2013, the Group's cash and cash equivalents balance was HK$691,273,000, of which HK$488,120,000 was denominated in Renminbi and HK$117,054,000 was denominated in United States Dollars while the remaining balance was denominated in Hong Kong Dollars. Cash and cash equivalents balance increased by 46.7% from the end of 2012.

As at 30 June 2013, the Group's borrowings comprised (1) unsecured bank borrowings of HK$259,318,000 (31 December 2012: HK$209,492,000); and (2) loans from a related company of HK$79,560,000 (31 December 2012: HK$79,560,000). 47.2% (31 December 2012: 55.4%) of the Group's borrowings was guaranteed by the Company. As at 30 June 2013, all of the Group's borrowings were repayable within 1 year while as at 31 December 2012, 44.6% of the Group's borrowings was repayable within 1 year and the remaining balance was repayable within 2 years. All borrowings were subject to annual interest rates ranging from 1.5% to 2.1% (31 December 2012: 0.9% to 2.3%) per annum. 70.7% (31 December 2012: 82.9%) of the Group's borrowings bears interest at floating rates. The management closely monitors the changes in market interest rates.

As at 30 June 2013, the Group's gearing ratio, calculated by dividing the net borrowings (being borrowings less cash and cash equivalents) of the Group by total equity attributable to equity shareholders of the Company, was -15.9% (31 December 2012: -8.6%).

As at 30 June 2013, the Group's available banking facilities amounted to HK$316,000,000, of which HK$184,103,000 was utilised and HK$131,897,000 was unutilised. Besides, 50.6% of the Group's banking facilities was guaranteed by the Company. Currently, the cash reserves and available banking facilities, as well as the steady cash flow from operations, are sufficient to meet the Group's debt obligations and business operations.

Capital Expenditure and Capital Commitments

The Group's capital expenditure in the first half of 2013 amounted to HK$9,570,000 (2012: HK$14,839,000). Capital commitments outstanding at 30 June 2013 not provided for in the financial statements amounted to HK$289,937,000 (31 December 2012: HK$252,143,000). Approximately RMB235 million (equivalent to approximately HK$295 million) was approved for the construction of a new tinplating production line of Zhongyue Tinplate, together with expansion of the relevant coating and printing production lines. It is expected that the capital expenditure for the year 2013 will be approximately HK$80 million.

Acquisitions and Disposals of Investments

During the first half of 2013, the Group had no material acquisitions and disposals of investments.

Charge on Assets

As at 30 June 2013, none of the assets of the Group was pledged.

Contingent Liabilities

In April 2013, a PRC third party filed a claim against a subsidiary of the Group in the Court of Zhongshan City to recover an outstanding trade debt of approximately RMB2,060,000 (equivalent to HK$2,586,000) and a penalty of approximately RMB4,962,000 (equivalent to $6,229,000) for non-payment. Currently, the court proceedings are still in progress.

In prior years, this PRC third party had also filed claims in respect of the same matter but the claims were denied. Based on the information currently available, the Group considers that no provision is required to be made in respect of this claim because the likelihood of an adverse outcome is remote.

Except for the abovementioned matter, the Group had no material contingent liabilities as at 30 June 2013.

Exchange Rate and Interest Rate Exposures

The majority of the Group's business operations are in Mainland China and Hong Kong. The Group is exposed to foreign currency risk primarily from import purchases from overseas suppliers and export sales to overseas customers that are denominated in a currency other than the functional currency of the operations to which they relate. The currency giving rise to this risk is mainly the United States Dollar against Renminbi. In respect of trade receivables and payables denominated in currencies other than the functional currency of the operations to which they relate, the Group ensures that the net exposure is kept to an acceptable level, by buying or selling foreign currencies at spot rates where necessary to address short-term imbalances.

In respect of unforeseen fluctuations of exchange rates, the Group will hedge the exposure as and when necessary. As at 30 June 2013, there were no forward foreign exchange or interest rate swap contracts entered into by the Group.

EMPLOYEES AND REMUNERATION POLICIES

As at 30 June 2013, the Group had a total of 1,243 full-time employees, a decrease of 39 from the end of 2012. 183 of the employees were based in Hong Kong and 1,060 were in Mainland China. The staff remuneration is determined in accordance with the duties, workload, skill requirements, hardship, working conditions and individual performance with reference to the prevailing industry practices. In 2013, the Group continued to implement control on the headcount, organisation structure and total salaries of each subsidiary. The performance bonus incentive scheme for the management remained effective. Through performance assessment of each subsidiary, a performance bonus was accrued according to various profit rankings and with reference to net cash inflow from operations and profit after taxation. In addition, bonuses will be rewarded to the management, key personnel and outstanding staff through assessment of individual performance. These incentive schemes have effectively improved the morale of our staff members. The Company has also adopted share option schemes to encourage excellent participants to continue their contribution to the Group.

PROSPECTS

Currently, the recovery of the European and US economies is slow, while the economic growth rate in the Mainland China reduced slightly. With the iron and steel price still staying at a low level in recent months, there is pressure on the sales of tinplate products and there will be certain challenges in the operating environment in the second half of 2013. In respect of the tinplating business, the Group will strive to increase production and sales volume and achieve economies of scale. Meanwhile, we will also actively transform and upgrade our business and start a new round of development. The Group is proposing to construct a new tinplating production line in Zhongshan, with annual production capacity of 150,000 tonnes, together with expansion of the relevant coating and printing production lines, in order to improve the standard of production equipment and product quality and to strengthen our core competitiveness. The Group is now preparing to apply to the relevant authorities of the local government for the construction of the project. As to the fresh and live foodstuffs business, in order to further improve our quality services, we will consolidate and develop our business chain operation, continue to explore new stable sources of supply for live pigs and ensure market supply. By leveraging on our sound financial position and abundant capital resources, we will continue to explore and capture various opportunities for development and strategic cooperation so as to promote the business of the Group to a new level.