TIME Interconnect Technology Limited Announces 2018 Interim Results

Nov 26, 2018 11:02 JST

Source: TIME Interconnect Technology Limited

Revenue Increased by 35.1% to HK$835.6 million

HONG KONG, Nov 26, 2018 - (ACN Newswire) - TIME Interconnect Technology Limited ("TIME Interconnect", Stock Code: 1729.HK, with its subsidiaries collectively referred to as the "Group") is pleased to announce its interim results for the six-month period ended 30 September 2018 (the "Reporting Period").

Following the Group's successful listing on the Main Board of the Stock Exchange on 13 February 2018, the Group has continuously maintained brilliant business performance and achieved encouraging results for the Reporting Period. The Group's revenue for the Reporting Period significantly increased by 35.1% to HK$835.6 million from $618.4 million in the previous financial year. Gross profit was HK$184.4 million, an increase of HK$41.4 million or 29.0% compared to the HK$143.0 million recorded in the previous financial year. Total profit of the Group for the Reporting Period was HK$88.4 million, an increase of HK$8.4 million as compared to the last financial year. By excluding the listing expenses and imputed financial guarantee income, net profit margin was recorded at 10.6% as compared to 13.5% in the previous financial year.

The Group has also fully utilized it listing status to enhance its financial position and overall competitiveness. Such dedication gains the market's recognition of its competitive advantages in terms of the Company's innovation, strong research and development capabilities as well as its financial capacity to invest in advanced technology relating to development and production of custom cable assemblies. Recently, the Group has been well recognized with the Group garnering two supply chain awards - "Excellent Supply Performance Award" and "Excellent Digital Collaboration Award" from their major telecommunication customer with the superior services delivered in the Reporting Period.

The basic and diluted earnings per share for the Reporting Period were HK 4.80 cents. The board of directors is pleased to declare an interim dividend of HK$0.01 per share, amounting to a total of approximately HK$18.4 million.

Business Review

All of the Group's business sectors have different degrees of increase in revenue, and the increase in revenue was mainly driven by the higher sales in telecommunication, data centre and medical equipment sectors.

The Group's turnover by business division is as follows:

Business Sector Six-Months Ended 30 September
Turnover (HK$ million) Share of Turnover
2018 2017 Changes 2018 2017
Telecommunication 391.1 278.0 40.7% 46.8% 44.9%
Data centre 323.7 281.3 15.1% 38.7% 45.5%
Medical equipment 74.8 25.7 191.1% 9.0% 4.2%
Industrial equipment 46.0 33.4 37.7% 5.5% 5.4%
Total 835.6 618.4 35.1% 100% 100%

Telecommunication - Benefited from the Greater Demand for New 5G Products
For the telecommunication sector, a rise on revenue from HK$278.0 million in the previous financial year to HK$391.1 million for the Reporting Period was recorded, representing an increase of 40.7%. Such surge was mainly attributable to the growing demand for new 5G products from the Group's major customers in this sector, which remained as the main sales growth driver of the Group's revenue in terms of amount and percentage, contributing to 52.1% of the total increase in the Group's revenue.

Data Centre - Maintained a High Shipment Level
The revenue generated from the data centre sector still maintained a high shipment level following by the last financial year, which has further increased by 15.1% to HK$323.7 million during the Reporting Period as compared to HK$281.3 million for the previous financial year.

Medical Equipment - Achieved Significant Growth Driven by the Robust Demand for Products
The revenue contributed by medical equipment sector achieved a significant growth rate of 191.1% from HK$25.7 million for the previous financial year to HK$74.8 million for the Reporting Period. Such represented the largest growth rate of the Group's revenue and the increase was mainly attributable to the robust demand for products from existing and new customers.

Industrial Equipment - Maintained Steady Growth on Revenue
The increase of revenue generated from the industrial equipment sector was at 37.7%, from HK$33.4 million for the previous financial year to HK$46.0 million for the Reporting Period.

Prospect

Looking ahead, benefited from the further development in the 5G, the growing trend of big data processing and the increase in production capacity, the management is optimistic about the prospects of the cable assembly business. Although the Sino-U.S. trade war has impacted the world as well as China's domestic economy, the Group has adopted certain actions to defeat the potential risks with a view to minimizing the impacts.

In the aspect of telecommunication sector and data centre sector, the management holds positive attitude towards the future development owing to the growing customer demands for the Group's products and the enlarged production capacity.

In respect of the medical equipment sector, the revenue is expected to rise in the financial year of 2019, which is driven by increasing orders from existing customers and increasing number of new customers. The management believes that the demand for medical cable assemblies would further sustain and the Group will continuously expand its R&D team so as to enhance the R&D capabilities in respect of launching such medical-grade products and technologies.

As for the industrial equipment sector, the revenue of this sector is difficult to predict with the impacts of the diplomatic policies and crises of various countries. In light of the unstable environment, the Group will pay close attention to changes in relevant circumstances and will try its best to grasp different business opportunities in order to minimize the risks and uncertainties.

Regarding the new businesses, the Group envisages that its various sectors will grow steadily to become significant businesses, driven by the advent of its core technologies. All of these businesses will serve as catalysts for its progress and growth. The Group has developed multi-products strategy and strengthened its scope of services to its global customers.

Furthermore, to meet with the increasing sales orders placed by the customers, the Directors agreed to acquire a parcel of industrial land with two industrial buildings of Huizhou Light Engine at the consideration of HK$166.8 million. Such acquisition has been proposed and approved at the extraordinary general meeting and is expected to offer the Group more than 120% of the increased production capacity, which would also add stability to the Group's sustainable development in medium term. The Directors plan to utilise the new production capacity for telecommunication sector, data centre sector and medical equipment sector in response to the market demand, driven by the advancement in technology such as the 5G and impact of digitalisation.

About TIME Interconnect Technology Limited
TIME Interconnect Technology Limited is a well-established supplier of custom cable assemblies with more than 20 years of experience in the cable assembly industry. The Group primarily manufactures and supplies a wide variety of copper and optical fibre cable assemblies which are produced in accordance with the specifications and designs of individual customer. The products of the Group are used by a number of established PRC and international customers in a variety of market sectors including telecommunications, data centre, industrial and medical equipment.

This press release is disseminated by Frement Financial Relations Limited on behalf of TIME Interconnect Technology Limited

For further enquiries, please contact Frement Financial Relations Limited:
Ms. Ashley Kung
Tel: (852) 2890 8262
Mob: (852) 6608 9927
Email: ashley@frement.com

Ms. Vanessa Wong
Tel: (852) 2890 8262
Mob: (852) 61271953
Email: vanessa@frement.com

Source: TIME Interconnect Technology Limited
Sectors: Daily Finance, Daily News