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 2014 Year 2013 First six months of 2013 Year 2012

RESULTS

For the first half of 2014, the unaudited consolidated profit attributable to shareholders was HK$66,563,000, representing a decrease of 13.3% from HK$76,755,000 for the corresponding period last year. Basic earnings per share was HK7.3 cents, a decrease of 14.1% from HK8.5 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 2014 of HK2.0 cents per share (six months ended 30 June 2013: HK2.0 cents per share).

BUSINESS REVIEW

In the first half of 2014, all major business segments of the Group recorded a decrease in both turnover and profit. The Group's consolidated turnover was HK$1,744,657,000, representing a decrease of HK$92,568,000 or 5.0% from HK$1,837,225,000 for the corresponding period last year. Profit from operations was HK$78,047,000, representing a decrease of HK$11,596,000 or 12.9% from HK$89,643,000 for the corresponding period last year.

In respect of our tinplating business, with more new tinplating production lines operated by other companies in Mainland China commencing production, the excess supply over demand in the iron and steel industry and intense competition, all these placed pressure on the sales of tinplate products and the selling price of tinplate products decreased during the current period. As the rate of decrease in the cost of raw materials was more than that in the selling price of tinplate products, gross profit for the period increased as compared to that in the corresponding period last year. However, due to the depreciation of Renminbi against the Hong Kong Dollar and the United States Dollar during the current period, an exchange loss was recorded for the period. Hence, profit of the Group's tinplating business decreased as compared to that in the corresponding period last year.

As to the fresh and live foodstuffs business, the turnover of the fresh and live foodstuffs business recorded a decrease, mainly due to the impact of avian flu on our distribution and sales of live poultry business resulting in the suspension of import of live poultry into Hong Kong during the current period. 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 46%. This provided a relatively steady contribution to the earnings of the Group.

In respect of the property leasing business, in line with the increase in the valuation of office units in Hong Kong in the first half of 2014, net valuation gains on investment properties of HK$22,930,000 (2013: HK$13,448,000) were recorded by the Group.

For the associates, as a result of the sluggish demand and decrease in selling price of the major products, corn starch, of Yellow Dragon Food Industry Co., Ltd., an associate of the Group, marginal profit for the period was recorded. On the other hand, the decrease in the price of live pigs led to losses being incurred by the two associates which are engaged in pig farming and sales of pigs.

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 2014, the Group produced 196,494 tonnes of tinplate products, which represented a decrease of 1.9% as compared to that in the corresponding period last year. Zhongyue Tinplate and Zhongyue Posco produced 109,585 tonnes and 86,909 tonnes respectively. In addition, the blackplate manufacturing plant of Zhongyue Tinplate produced 66,627 tonnes of blackplates, a decrease of 10.3% 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 197,071 tonnes of tinplate products, a decrease of 0.9% as compared to that in the corresponding period last year, of which, Zhongyue Tinplate and Zhongyue Posco sold 111,195 tonnes and 85,876 tonnes respectively, an increase of 4.3% and a decrease of 6.9% respectively as compared to that in the corresponding period last year. Turnover was HK$1,582,572,000, a decrease of 4.9% as compared to the corresponding period last year and profit was HK$33,714,000, a decrease of HK$11,042,000 or 24.7% as compared to that in the corresponding period last year. The tinplating business accounted for 90.7% and 43.2% of the Group's turnover and profit from operations respectively.

In the first half of 2014, with more new tinplating production lines operated by other companies in Mainland China commencing production, the excess supply over demand in the iron and steel industry and intense competition, all these placed pressure on the sales of tinplate products and the selling price of tinplate products decreased during the current period. As the rate of decrease in the cost of raw materials was more than that in the selling price of tinplate products, gross profit for the period increased as compared to that in the corresponding period last year. However, due to the depreciation of Renminbi against the Hong Kong Dollar and the United States Dollar during the current period, an exchange loss was recorded for the period. Hence, profit of the Group's tinplating business decreased as compared to that in the corresponding period last year. 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 significantly increased accordingly. Sales volume was also stabilised by capitalising on the favourable position in capital management, adopting selling price more comparable to the market rate and adopting effective control in trade receivables' management. The Group continued the implementation of full budgetary control, strengthening of the internal control and improving its human resources management system by streamlining human resources, improving efficiency and optimising performance management. It also promoted energy saving, waste reduction and efficiency optimisation. All these in turn mitigated the pressure on the Group regarding the decrease in the selling price of tinplate products and the surge in various operating costs. During the period, Zhongyue Tinplate passed the Food Safety System Certification (FSSC 22000), incubating new strengths for our business of metallic packaging for food.

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 plants in our factory area in Zhongshan, which were previously let out, 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. Besides, Zhongyue Posco is also acquiring coating and printing production lines. It is estimated that the total investment cost of these production lines will be approximately RMB265 million (equivalent to approximately HK$334 million). These new production lines will enable the Group 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. It is expected that these coating and printing production lines will commence operation consecutively in the second half of 2014, while the new tinplating production line will commence operation in early 2015. By that time, the annual production capacity of tinplate products, blackplates, and coated and printed tinplates of the Group's factories in northern and southern China will become 620,000 tonnes, 150,000 tonnes and 100,000 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, a 16.12% 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 July 2014, the shares of Hubei Jinxu were listed on the National Equities Exchange and Quotations in Mainland China.

In the first half of 2014, the turnover of the fresh and live foodstuffs business amounted to HK$150,775,000, representing a decrease of 5.6% as compared to that in the corresponding period last year. Together with the share of losses of two associates, namely Hubei Jinxu and Guangdong Baojin, of HK$8,318,000, the total profit was HK$34,495,000, representing a decrease of HK$8,047,000 or 18.9% as compared to that in the corresponding period last year. Turnover decreased mainly due to the impact of avian flu on our distribution and sales of live poultry business resulting in the suspension of import of live poultry into Hong Kong during the current period. On the other hand, the decrease in the price of live pigs led to losses being incurred by the two associates, which are engaged in pig farming and sales of pigs. 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 46%. 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 the office units in Hong Kong.

In the first half of 2014, turnover from the property leasing business of the Group was HK$11,310,000, a decrease of 15.2% as compared to that in the corresponding period last year. Profit amounted to HK$7,641,000, a decrease of 5.9% 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 2014, net valuation gains on investment properties of HK$22,930,000 (2013: HK$13,448,000) 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 2014, Yellow Dragon recorded a sales volume of 181,554 tonnes in its major product, corn starch, representing a decrease of 13.8% as compared to that the corresponding period last year. Turnover was HK$904,262,000, a decrease of 11.8% as compared to that in the corresponding period last year. As a result of the sluggish demand and decrease in selling price of the major product, marginal profit for the period was recorded. Profit attributable to the shareholders was HK$1,284,000 (2013: HK$3,361,000).

FINANCIAL POSITION

As at 30 June 2014, the Group's total assets and total liabilities amounted to HK$3,720,237,000 and HK$1,183,869,000, representing an increase of HK$414,263,000 and HK$380,341,000 respectively when compared with the positions at the end of 2013. Net current assets increased from HK$1,011,345,000 at the end of 2013 to HK$1,425,840,000. The current ratio (current assets divided by current liabilities) also increased from 2.3 as at the end of 2013 to 2.9.

Liquidity and Financial Resources

As at 30 June 2014, the Group's cash and cash equivalents balance was HK$1,031,402,000, of which HK$857,605,000 was denominated in Renminbi and HK$76,631,000 was denominated in United States Dollars while the remaining balance was denominated in Hong Kong Dollars. Cash and cash equivalents balance increased by 54.2% from the end of 2013, mainly from the proceeds of new loans.

As at 30 June 2014, the Group's borrowings comprised 1) unsecured bank borrowings of HK$505,126,000 (31 December 2013: HK$172,523,000); and 2) loans from a related company of HK$79,560,000 (31 December 2013: HK$79,560,000). 68.4% (31 December 2013: 63.5%) of the Group's borrowings was guaranteed by the Company. As at 30 June 2014, 31.6% of the Group's borrowings was repayable within 1 year and the remaining balance was repayable within 2 years while as at 31 December 2013, all of the Group's borrowings were repayable within 1 year. All borrowings were subject to annual interest rates ranging from 1.65% to 2.28% (31 December 2013: 1.74% to 2.16%) per annum. 82.0% (31 December 2013: 95.0%) of the Group's borrowings bear interest at floating rates. Management closely monitors the changes in market interest rates.

As at 30 June 2014, 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 -19.1% (31 December 2013: -18.1%).

In January 2014, the Group entered into a facility agreement (the "Facility Agreement") with Industrial and Commercial Bank of China (Asia) Limited and The Hongkong and Shanghai Banking Corporation Limited. In accordance with the Facility Agreement, the Group was granted a two-year term loan facility with a maximum amount of HK$400,000,000 for the purpose of general corporate financing requirements. The above-mentioned facility was fully drawn, and the Group's former bank loan of HK$160,000,000, which matured in June 2014, was early repaid in full during the current period.

As at 30 June 2014, the Group's available banking facilities amounted to HK$684,526,000, of which HK$541,212,000 was utilised and HK$143,314,000 was unutilised. 58.4% 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 2014 amounted to HK$42,366,000 (2013: HK$9,570,000). Capital commitments outstanding at 30 June 2014 not provided for in the financial statements amounted to HK$247,205,000 (31 December 2013: HK$254,599,000), mainly for the construction of a new tinplating production line and the coating and printing production lines. It is expected that the capital expenditure for the year 2014 will be approximately HK$230 million.

Acquisitions and Disposals of Investments

During the first half of 2014, the Group had no material acquisitions and disposals of investments.

Charge on Assets

As at 30 June 2014, none of the assets of the Group was pledged.

Contingent liabilities

In 2013, a third party in Mainland China 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$2,595,000) and a penalty of approximately RMB4,962,000 (equivalent to HK$6,251,000) for non-payment. According to the judgement made by the Court of Zhongshan City in May 2014, the subsidiary is required to repay the above trade debt and the related penalty. The subsidiary submitted an appeal in June 2014 to the High Court of Guangdong Province. Currently, the court appeal proceedings are still in progress.

In prior years, this same third party had also filed claims in respect of the same matter and had won the case, but the claims were finally denied by court. Based on the information currently available and a legal opinion obtained, the Group considers that the subsidiary has a considerable prospect of success in the above litigation. Accordingly, no provision was made in respect of this claim.

Except for the abovementioned matter, the Group had no material contingent liabilities as at 30 June 2014.

Exchange Rate and Interest Rate Exposures

The majority of the Group's business operations are in Hong Kong and Mainland China. 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 in exchange rates, the Group will hedge the exposure as and when necessary. As at 30 June 2014, forward foreign exchange contracts of RMB138,308,000 (equivalent to HK$174,240,000) against United States Dollar were entered into by the Group to hedge against currency risks in respect of export sales. As at 31 December 2013, forward foreign exchange contracts equivalent to HK$232,954,000 in total were entered into by the Group.

EMPLOYEES AND REMUNERATION POLICIES

As at 30 June 2014, the Group had a total of 1,196 full-time employees, a decrease of 40 from the end of 2013. 191 of the employees were based in Hong Kong and 1,005 were in Mainland China. 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 2014, the Group continued to implement control on the headcount, organisation structure and total salaries of each subsidiary. The performance bonus incentive scheme for 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 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 Mainland China reduced slightly. With more new tinplating production lines operated by other companies in Mainland China commencing production, there is pressure on the sales of tinplate products and there will be certain challenges in the operating environment in future. Although Renminbi depreciated against the United States Dollars at the beginning of this year, it began to stabilise in recent months. It is expected to continue to fluctuate in dual directions and will have an impact on the Group's earnings. 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 constructing a new tinplating production line with an annual production capacity of 150,000 tonnes, and acquiring coating and printing production lines, in order to improve the standard of production equipment and product quality and to strengthen our core competitiveness. It is expected that these coating and printing production lines will commence operation consecutively in the second half of 2014, while the new tinplating production line will commence operation in early 2015. 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 and 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.