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Valuetronics Holdings Ltd, a premier design and manufacturing partner for the world's leading brands in the Consumer Electronics (CE) and Industrial and Commercial Electronics (ICE) sectors, has announced that its net profit for the three months ended 30 September 2016 (2Q FY2017) rose by 18.2% to hit HK$38.1 million, on the back of a revenue of HK$573.7 million.
Ricky Tse Chong Hing, Chairman and Managing Director of Valuetronics, commented, "We continue to see steady growth in our ICE segment, and I am happy to report that our CE segment is also growing mainly due to the introduction of new wireless lighting products. We are aiming to acquire more of such smart, connected products for both our CE and ICE segments, and capture the global Internet-of-Things trend."
2Q FY2017 Financial Highlights
The Group's revenue for 2Q FY2017 increased by 9% from HK$526.5 million in 2Q FY2016 to HK$573.7 million in 2Q FY2017.
In 2Q FY2017, ICE segmental revenue increased by 8.7% to HK$312.6 million from HK$287.5 million in Q2FY2016. The increase was mainly contributed by the increase in demand from some ICE customers.
The CE segmental revenue increased by 9.2% to HK$261.1 million in 2Q FY2017 from HK$239.0 million in Q2FY2016, which was mainly due to the increase in demand from some CE customers and the expansion of its product portfolio to include wireless lighting products with smart control features.
The Group’s gross profit for 2Q FY2017 increased by 8.4% to HK$83.5 million from HK$77.0 million in Q2FY2016, while gross profit margin remained stable at 14.6% for 2Q FY2017 and Q2FY2016.
Selling and distribution costs increased by HK$2.9 million to HK$6.9 million from HK$4.0 million in Q2FY2016. During the last period, the Group recorded a write-back of provision for sales returns and claims amounted to HK$3.4 million. In line with inflation, administrative expenses increased slightly by 1.7% to HK$37.1 million from HK$36.5 million.
As a result of the above, the Group’s net profit attributable to shareholders 2Q FY2017 increased by 18.2% to HK$38.1 million from HK$32.2 million in Q2FY2016.
Healthy Financial Position
As at 30 September 2016, the Group had net current assets of HK$622.0 million (31 March 2016: HK$605.5 million), total assets of HK$1,643.6 million (31 March 2016: HK$1,506.0 million) and shareholders' funds of HK$851.9 million (31 March 2016: HK$857.3 million). The Group also had cash and cash equivalents of HK$659.2 million (31 March 2016: HK$689.3 million) following the distribution of a cash dividend of HK$75.8 million during the period.
During 2Q FY2017, Valuetronics continued to benefit from the widened customer base in the ICE segment, while the CE segment has shown a return to revenue growth driven by the introduction of new smart lighting products.
The Group’s ICE segment continued to provide steady growth in 2Q FY2017, mainly driven by stronger demand from some ICE customers and connectivity modules used in the automotive industry. Valuetronics is well-positioned to ride on the rise of in-car connectivity, and will further pursue such opportunities and others, within the automotive industry.
The CE segment recorded revenue growth from a portfolio of products with consumer applications as well as a new revenue stream from smart lighting products. Leveraging on its manufacturing expertise in LED products, the Group started the mass production of wireless lighting products with smart control features in 2Q FY2017. These wireless lighting products contain various LEDs that specially chosen to produce wide range of intensities and over 16 million colors via mobile application which allows users to control the lighting from anywhere.
The wireless lighting product in the CE segment and in-car connectivity modules in the ICE segment are examples of the adoption of connectivity elements to traditional electronic products, as a result of the global Internet-of-Things (IOT) trend. Valuetronics will ride on the opportunities in the confluence of technologies under the IOT.
While Valuetronics is well positioned to take advantage of a widened product portfolio and opportunities in the pipeline, like most manufacturers, it continues to operate in an uncertain macro-economic environment. External factors like a US dollar interest rate hike and a slip in general business confidence may have potential impacts on its business, however barring unforeseen circumstances, the management expects the Group to remain profitable for the financial year ended 31 March 2017.
Valuetronics is a premier design and manufacturing partner for the world’s leading brands. The Group’s customer base covers the industrial and commercial electronics, medical equipment and consumer electronics industries, which span across a wide geographical region that covers America, Europe and the Asia Pacific. The Group’s customers include OEMs and ODMs as well as international brand owners. Headquartered in Hong Kong, the Group’s main manufacturing facility is located in Long Shan 2nd Road, Western District of Science and Technology Park, Dayawan Economy and Technology Development District, Huizhou City, Guangdong Province, PRC. For more information, click here.