Company Profile Changda Holdings mainly produces and sells clothing labels and decorative products, such as tags, cloth labels and heat transfer products. According to Frost & Sullivan's report, the company ranked fifth in China's clothing label and decoration product manufacturing market based on 2018 earnings. The company began printing business in Hong Kong in 1992. Since then, it has set up major production facilities in mainland China, Bangladesh and Vietnam, with a total construction area of about 37,902 square meters, 3,300 square meters and 2,370 square meters respectively, with a total of over 400 printers. Chinese and Thai perspectives: According to the Frost & Sullivan report, the market size of clothing label and decoration products in terms of revenue is expected to grow at a CAGR of 8.6% from RMB 15.6 billion in 2019 to RMB 21.7 billion in 2023. Furthermore, considering the rising demand from foreign garment manufacturers and buyers and the steady growth of the clothing retail market in the US and Europe, the value of related clothing labels and decoration products from overseas sales is expected to increase from RMB 7.3 billion in 2019 to RMB 9 billion in 2023, with a CAGR of 5.4%. In terms of operating performance: For the 2016 to 2018 fiscal year and ending August 31, 2019, the company's revenue was HK$0.24 billion, HK$0.31 billion, HK$0.37 billion and HK$0.23 billion respectively, with revenue from mainland China and Hong Kong accounting for up to 62.8%, 61.8%, 55.3% and 53.1%, respectively; gross margins were 44.3%, 42.8%, 43.7% and 48.2%, respectively. The increase in gross margin in 2019 was due to sales Costs declined due to the devaluation of RMB against the Hong Kong dollar, resulting in lower raw material costs and direct labor costs in Hong Kong dollars; the total cost of raw materials used by the company to produce printed products accounted for about 51.3%, 55.5%, 48.9% and 47.8% of total sales costs, respectively; net interest rates were 8.1%, 8.4%, 9.1% and 5.5%, respectively. Valuation: Based on the 2 billion share capital after the global public offering, the company's market value is HK$0.5-0.58 billion, which is lower than the average of the Hong Kong stock industry. The company's price-earnings ratio in '18 was about 14.8-17.2 times, higher than the industry average; the net price-earnings ratio was about 2.27-2.42 times, higher than the industry average. In terms of profitability, the 18-year ROE and ROA were 28.9% and 12.5% respectively, which is higher than the industry average. This is the sponsor's first project with no historical track record to refer to. Considering that nearly 70% of the company's revenue comes from printing tags, we compared the valuation level of the printing industry rather than the garment and textile industry. We believe that the valuation is still too high and give it a rating of 51 points, and the rating is “no subscription.” Risk warning: (1) A small portion of the benefits comes from the US and Europe, international trade risks, (2) fluctuations in raw material costs