Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 82

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 4
Chunk 82
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 there is any further disruption in our supply
chain, we will response swiftly such as, within our capital constraints, increase our raw material inventories in order to manage and
mitigate such risk. Our Group’s gross profit margin increased from 15.7% for the year ended December 31, 2022 to 18.6% for the fiscal
year ended December 31, 2023. The increase in gross profit margin was primarily due to the continuing diminishing effect of the COVID
19.

Impact in the U. S. of the Uyghur Forced Labor Prevention
Act (the “ UFLPA”) and the War in Ukraine on our Operating Subsidiaries’ business and operations.

The UFLPA prohibits on the importation
of goods into the United States manufactured wholly or in part with forced labor in the PRC, especially from the Xinjiang Uyghur Autonomous
Region (“ Xinjiang”). It establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise
mined, produced, or manufactured wholly or in part in Xinjiang are not entitled to entry to the U. S. and requires the importer of record
to comply with specified conditions and, by clear and convincing evidence, that the goods, wares, articles, or merchandise were not produced
using forced labor.

  51  

While our manufacturing facilities
are located in the PRC, they are not located in Xinjiang and are staffed by our own employees with no raw materials being sourced from
Xinjiang. We are confident that our supply chain management system will rebut the presumption that our products are tainted with forced
or prison labor and therefore we do not anticipate any material or adverse effect our business operations, financial position, and results
of operations.

The recent outbreak of war in
Ukraine has already affected global economic markets, including a dramatic increase in the price of oil and gas, and the uncertain resolution
of this conflict could result in protracted and/or severe damage to the global economy. Russia’s recent military interventions in
Ukraine have led to, and may lead to, additional sanctions being levied by the United States, European Union, and other countries against
Russia and countries supporting Russia. Russia’s military incursion and the resulting sanctions could adversely affect global energy
and financial markets and thus could affect our businesses and the businesses of our customer, even though we do not have any direct exposure
to Russia or the adjoining geographic regions. The extent and