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Net Profit surged by 34.1% to HK$71.2 million;
Interim dividend at HK3.0 cents per share;
Strong growth recorded in various segments;
Medical and health care plastic components sales growth was more than double |
HONG KONG, Aug 14, 2015 - (ACN Newswire) - A leading provider of one-stop plastics solutions, TK Group (Holdings) Limited ("TK Group" or the "Group"; stock code: 2283) today announced its results for the six months ended 30 June 2015 (the "Period").
During the Period, driven by the strong sales growth in the mobile phones and wearable devices, the medical and health care and the commercial telecommunications equipment segments, the Group's revenue amounted to HK$733.5 million, representing an increase of 38.8% compared with the same period last year (1H2014: HK$528.6 million). The Group recorded a gross profit of HK$183.6 million (1H2014: HK$135.1 million) with a stable gross profit margin of 25.0% (1H2014: 25.6%). Profit attributable to owners of the Group amounted to $71.2 million (1H2014: HK$53.1 million), representing an increase of 34.1% as compared with the same period last year. Net profit margin was 9.7% (1H2014: 10.0%. Basic earnings per share for the Period was HK8.6 cents (1H2014: HK6.4 cents).
The Board resolved to declare an interim dividend of HK3.0 cents per share, representing a dividend payout ratio of approximately 34.8%
Business Overview
Mr. Alan Li, Chairman of TK Group, said, "During the period under review, the Group has successfully grasped the market opportunity and flexibly adjusted our strategic product restructuring, including exploitation and promotion of the development of the products related to mobile phones and wearable devices and the medical and healthcare industries. Thus the Group can cater for explosive growth of the wearable devices industry as well as to tap the development of 'Big Healthcare Era.' This strategic restructuring has benefitted TK Group. During the period, the total turnover recorded strong growth, driven by robust sales of the related plastic components. The Group has continued to enhance automated and streamlined production operations, and stepped up investments in research and development and production automation. While improving our technological advantages, we have also closely monitored market changes in order to achieve a balanced development in a sustainable and healthy manner."
Being a leading provider of one-stop integrated plastics solutions, TK Group provides customised, cost effective and high precision products and services to a diverse range of internationally renowned companies. The Group's one-stop plastics solutions cover product design and optimisation, mold fabrication, plastic injection production, secondary processing services and final assembly. During the Period, the Group continued to enhance its automatic and streamlined production, increased investments in research and development and production automation.
Last year, the Group strategically restructured its product mix, successfully exploited and promoted the development of related products in mobile phones and wearable devices as well as medical and health care industries. With the automation implemented in production lines, the Group?s revenue recorded strong growth in the first half of 2015.
Mold Fabrication Business
The income of the mold fabrication business division was mainly derived from sales of performance molds and standard molds. The turnover of this business segment amounted to HK$244.2 million, representing an increase of 6.3% when compared to HK$230.2 million in the same period last year, and accounting for 33.3% of the Group's total turnover. Due to the long mold fabrication cycle, the expansion of production capacity in the fourth quarter of 2014 did not bring substantial sales growth in the short run, and the related business units are expected to generate sales in the fourth quarter of 2015.
Plastic Components Business
The turnover of the plastic components business amounted to approximately HK$489.4 million, representing an increase of 64.0% when compared to approximately HK$298.4 million in the same period last year. The product restructuring in response to market conditions and the automated production strategy implemented in 2014 reaped benefits for the Group during the current period. During the period, sales in the mobile phones and wearable devices industry, the medical and healthcare industry and the commercial telecommunications equipment industry all recorded strong growth.
Four strategic business segments
During the Period, the four segments, namely mobile phones and wearable devices, medical and health care, commercial telecommunications equipment and automobiles, accounted for 76.1% of the total revenue. They were the major growth drivers of the Group's revenue. Among all, revenue from mobile phones and wearable devices, the largest segment, increased by 57.2% year- on-year to HK$176.4 million. Revenue from medical and health care, the highest growth segment, increased by 142.9% year-on-year to HK$95.7 million. Commercial telecommunications equipment and automobiles increased 93.1% and 41.9% year-on-year to HK$168.4 million and HK$118.2 million respectively.
Outlook
Looking ahead to the second half of 2015, Mr. Li Pui Leung, Chairman of TK Group, commented, "Despite that slower economic growth and intense competition in the industry are expected, all business units of the Group will work closely together, and strive to develop new markets to enhance market share, as well as strengthen operation management and cost control, so as to maximize returns for the shareholders and investors," he continued, "the Group has kept itself in pace with the rapid changes of new technology. We introduced the highly automated flexible production line that meets the Industry 4.0 concept early this year and enhanced production efficiency. It is expected that the Group will invest over HK$20 million to develop automatic equipment such as robots, advancing the plastic components business with high-precision and automation. The management will lead the Group to continue serving its high-end brand customers, ensuring long-term development."
As for the mold fabrication business, the new business units specialising in ultra-large standard molds, automatic precision mold business unit and packaging and medical business unit commenced stable operation during the Period. It is expected to start generating sales in the fourth quarter of 2015, contributing to a growth of mold fabrication business throughout the year. Regarding the plastic components business, it is anticipated that growth momentum of the mobile phones and wearable devices, the medical and health care, the automobiles as well as the commercial telecommunications equipment segments will remain strong. With the new plant in Eastern China commencing production in the fourth quarter of 2014 bringing in additional capacity, the Group believes the plastic components business will realise a steady growth throughout the year.
Mr. Yung Kin Cheung Michael, Chief Executive Officer of the Group, concluded, "Since 2014, TK Group has endeavored to expand production capacity and achieve a comprehensive and automated level of production. Apart from improving technologies to control cost, the Group has successfully expanded customer base to various renowned brands in the mobile phones and wearable devices industry, particularly the drones and smart home markets. The strategic structural adjustment last year has yielded corresponding benefits for the Group. We expected 2015 will be a year of harvest with substantial growth."
Contact:
Strategic Financial Relations Limited
Heidi So Tel: 2864 4826 Email: heidi.so@sprg.com.hk
Keris Leung Tel: 2864 4863 Email: keris.leung@sprg.com.hk
Angel Li Tel: 2864 4859 Email: angelok.li@sprg.com.hk
Topic: Press release summary
Source: TK Group (Holdings) Limited
Sectors: Daily Finance
https://www.acnnewswire.com
From the Asia Corporate News Network
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