Alltronics 2017 Interim Net Profit Surges by 95.5% to HK$57.1 Million

Aug 29, 2017 21:19 JST

Source: Alltronics Holdings Limited

Business Diversification Drives Continuous Revenue Growth

HONG KONG, Aug 29, 2017 - (ACN Newswire) - Alltronics Holdings Limited ("Alltronics" or the "Group") (Stock code: 833), a leading electronic products manufacturer, a provider of energy-saving business solutions and a provider of property rental services has today announced its unaudited interim results for the six months ended 30 June 2017 ("1H2017").

During 1H2017, the Group's revenue increased significantly by 43.4% to HK$675.5 million, mainly due to the increase in revenue from the electronic products segment and the rental income recognised from the investment property acquired during the period. Gross profit surged by 125.3% to HK$211.8 million, with gross profit margin improving to 31.4%. Profit attributable to owners of the Company soared 95.5% to HK$57.1 million, mainly due to the increase in revenue and the improvement in gross profit margin on electronic products; and the acquisition of the investment property group has resulted in a gain from bargain purchase of HK$6.3 million. The Group's net profit margin has improved to 8.5%.

Basic earnings per share were HK6.04 cents. In appreciation of the shareholders' continuous support, the Board has declared the payment of an interim dividend of HK3.0 cents per share (1H2016: HK5.0 cents per share ).

Business Review
Revenue from the sales of electronic products, including finished electronic products, plastic moulds and components, and other components for electronic products, increased by 28.0% to HK$595.8 million (1H2016: HK$465.4 million). The growth was mainly attributable to the increase in sales of finished electronic products, which climbed 35.4% to HK$475.5 million (1H2016: HK$351.3 million). Sales of walkie-talkie products had increased by approximately HK$74.0 million, of which HK$18.2 million of walkie-talkie products were sold to Xian Feng Yu Technology Limited ("Xian Feng Yu"), one of the companies within the Xiaomi Ecosystem. Moreover, sales of irrigation controller products to the Group's largest customer in the United States had increased by approximately HK$22.3 million. On the other hand, sales revenue from other components for electronic products had increased by HK$6.3 million whereas the sales revenue from plastic moulds and components had remained stable during 1H2017.

As for the investment property segment, the Group had completed the acquisition of Bonroy Limited and its subsidiaries (the "Bonroy Group") on 24 January. The principal asset of the Bonroy Group is the investment property known as "Pretty Shopping Centre" located at Beijing, the "PRC". During 1H2017, a total of HK$77.1 million in rental income was recognised from Pretty Shopping Centre.

With regard to the energy-saving business segment, a total revenue of HK$0.7 million was recorded in 1H2017 (1H2016: HK$3.8 million), representing the energy-saving revenue generated from installation of LED lighting equipment at retail stores of Suning Commerce Group Co., Ltd. ("Suning") and hotels operated by the HNA Group Co., Ltd. The installation work for the Suning EMC Project continued and installation work for approximately 660 retail stores of Suning have been completed as at 30 June 2017.

The biodiesel products segment recorded sales revenue of HK$1.9 million in 1H2017, and about 100 energy efficient gas stoves had been installed for customers in Hong Kong as at 30 June 2017.

Prospects
Despite the uncertain global economic environment, the Group has confidence that the overall performance of the electronic business segment will remain outstanding during the second half of 2017, with demand for its irrigation controllers and other major electronic products staying strong. In addition, new products such as walkie-talkie products manufactured for Xian Feng Yu and photolysis air purifiers will provide strong momentum for revenue growth.

Moreover, the Group foresees that the contribution from its 42.34%-owned associate Yichun Yilian Print Tech. Co. Ltd. ("Yichun Yilian") will become more and more significant. Yichun Yilian is established in the PRC and is principally engaged in the manufacturing and sale of printers and other accessory products, and the provision of on-line printing services on a charge-by-page basis. During the period, two strategic investors had injected additional capital of RMB36.0 million in aggregate into Yichun Yilian. As at 30 June 2017, Yichun Yilian has distributed more than 3,500 printers to more than 120 universities and colleges in the PRC to provide on-line printing services. It is expected that the revenue from the on-line printing services will become Yichun Yilian's major revenue source in the future.

Yichun Yilian was granted with the right to use an industrial park (the "Industrial Park") at Yuanzhou, the PRC, for a priod of 50 years. The total gross floor area of the industrial park is approximately 200,000 square meters and Yichun Yilian will set up production facilities for printers and accessories products with annual output of approximately 800,000 laser printers and 10,000,000 cartridges for laser printers. The Group will also set up new production facilities for its electronic products and components in the industrial park so as to expand its overall production capacity to cope with the increase in demand and for production of new products to be launched.

Turning to the investment property segment, the Group has decided to carry out renovation work at Pretty Shopping Centre in order to attract more prominent and prestigious tenants and to increase the future rental income. The renovation work is expected to be completed in the first quarter of 2018.

The Group expects the revenue from biodiesel products will remain stable during the second half of 2017, and the energy efficient gas stoves business to record steady growth. While for the energy-saving business, the Group will continue the installation works at other retail stores of Suning.

Mr. Lam Yin Kee, Chairman of Alltronics concluded, "We are glad to see the Group maintain the strong growth momentum and achieve a remarkable performance in 1H2017, through our unwavering efforts to diversify the business. Looking ahead, we will continue to tighten controls over production costs and overhead, and improve production efficiency so as to maximise the gross profit margin. Furthermore, we will strive to explore opportunities for new products and projects with other potential customers in Hong Kong, the PRC and overseas, and will continue to look for investment opportunities to further diversify our business, aiming to generate a better return to all of our shareholders."

About Alltronics Holdings Limited (Stock code: 833)
Alltronics Holdings Limited is mainly engaged in the design and manufacture of a wide range of electronics products with quality and style, supplying biodiesel products as well as the provision of energy-saving business solutions and property rental services. Besides, the Company is in the process of diversifying its business into manufacturing patented Wi-Fi Products, medical equipment and printers. The Company is a constituent stock of Morgan Stanley Capital International ("MSCI") Hong Kong Micro Cap Index. For more information, please visit http://www.alltronics.com.hk/.

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Source: Alltronics Holdings Limited
Sectors: Daily Finance, Daily News