TIME INTERCON-汇聚科技(01729) - 2022 - 中期财报

Business Overview - The Group has nearly 30 years of experience in providing customized interconnect solutions and has expanded its business scale continuously in 2020 and 2021, covering digital cable and automotive wire harness sectors [3]. - The Group manufactures a wide variety of copper and optical fiber cable assemblies and digital cable products tailored to individual customer specifications, serving established PRC and international clients across various sectors [3]. - The Group aims to become a Tier-1 supplier of cable products and high-performance interconnect products in the 5G telecommunications, data communication, healthcare, transport, and industrial sectors [6]. - The Group's business model is based on Contract Manufacturing Services (CMS), producing made-to-order cable products upon receipt of customer orders [4]. - The Group has established long-term and stable business relationships with market leaders, enhancing its competitive strength in the interconnect market [7]. - The Group's headquarters is located in Hong Kong, with manufacturing facilities in Shanghai, Suzhou, and Huizhou, PRC [3]. - The Group's vision is to be recognized as a "Preferred Supplier" capable of delivering world-class quality products and services consistently [5]. - The Group's management team possesses extensive market knowledge, contributing to its competitive advantages in the industry [7]. Financial Performance - Revenue for the six months ended 30 September 2021 was HK $1,740.5 million, representing a 20.7% increase from HK$ 1,441.7 million in the same period last year [11]. - Gross profit for the same period was HK $308.4 million, a slight increase of 1.5% compared to HK$ 303.8 million in the previous year [11]. - Adjusted total profit for the period was HK $114.9 million, down 14.8% from HK$ 134.8 million in the prior year [11]. - Basic earnings per share (adjusted) decreased to 6.2 Hong Kong cents, a decline of 15.1% from 7.3 Hong Kong cents in the same period last year [11]. - The gross profit margin decreased to 17.7%, down 3.4 percentage points from 21.1% in the previous year [11]. - Operating profit for the Reporting Period was HK $157.8 million, a decrease of HK$ 32.4 million or 17.0% from HK $190.2 million for the same period last year, with the operating profit margin dropping to 9.1% [16]. - The Group's net profit margin for the Reporting Period was 6.6%, down from 9.4% in the previous year [16]. - Total operating expenses for the Reporting Period were HK$ 1,582.7 million, representing 90.9% of revenue, an increase from 86.8% in the previous year [16]. Market and Sector Performance - Data centre sector revenue increased by HK $7.1 million or 1.9% to HK$ 375.0 million compared to HK $367.9 million in the same period last year, maintaining the highest revenue sector in the cable assembly business [19]. - Telecommunication sector revenue declined by HK$ 25.8 million or 8.4% to HK $282.9 million from HK$ 308.7 million in the same period last year, although profit margins improved due to stable 5G product orders [20]. - Medical equipment sector revenue rose by HK $32.5 million or 34.8% to HK$ 126.0 million from HK $93.5 million in the same period last year, driven by increased orders for medical equipment cables [21]. - Industrial equipment sector revenue increased by HK$ 21.8 million or 57.5% to HK $59.7 million from HK$ 37.9 million in the same period last year, supported by economic recovery measures [21]. - Automotive sector generated HK $12.1 million in revenue for one month following the acquisition of automotive wire harness business, enhancing the company's investment portfolio [22]. - Networking cable revenue increased by HK$ 271.7 million or 47.8% to HK $839.8 million from HK$ 568.1 million in the same period last year, with price adjustments linked to copper price fluctuations [24]. - Specialty cable revenue decreased by HK $20.6 million or 31.4% to HK$ 45.0 million from HK $65.6 million in the same period last year, with a significant drop when excluding copper price impacts [25]. Acquisitions and Strategic Developments - The Group completed the acquisition of automotive wire harness manufacturing and sales business for a final consideration of HK$ 69.0 million, enhancing its income sources and long-term development potential [14]. - The Group has restructured its "Networking Cables Business Unit" into "Digital Cable Business Unit," subdividing it into "Networking Cable Sector" and "Specialty Cable Sector" to align with its strategy of accelerating specialty cable development [14]. - The successful acquisition of GPIM Group provides an opportunity to expand and diversify the Group's business and investment portfolio, enhancing income sources and long-term development potential [43]. - The acquisition of Linkz Cables Limited has created synergy by integrating R&D resources, enabling the production of reliable and high-quality smart car products [44]. Financial Position and Capital Management - As of September 30, 2021, shareholders' funds increased by HK $77.8 million or 9.1% to approximately HK$ 930.3 million from HK $852.5 million as of March 31, 2021 [46]. - The Group's bank balances and cash rose by 41.1% to HK$ 220.9 million as of September 30, 2021, compared to HK $156.6 million as of March 31, 2021 [46]. - The Group's bank loan increased by HK$ 115.4 million or 11.4% to HK $1,127.6 million as of September 30, 2021, primarily due to a new bank loan of HK$ 50 million for the acquisition of automotive wire harness business [46]. - Capital expenditure for the reporting period amounted to HK $39.7 million, funded entirely from internal resources [46]. - The Group's gearing ratio was 119.6% as of September 30, 2021, compared to 117.1% as of March 31, 2021 [47]. - The Group monitors foreign exchange risk exposure and enters into forward foreign exchange contracts to mitigate this risk [49]. - The Group maintains a prudent financial management policy and does not engage in high-risk speculative activities [50]. Corporate Governance and Compliance - The Company has fully complied with the Corporate Governance Code during the six months ended 30 September 2021 [84]. - The Audit Committee, established on 24 January 2018, is responsible for reviewing financial information, internal control procedures, and risk management systems [84]. - All Directors have fully complied with the required standards set out in the Model Code during the six months ended 30 September 2021 [85]. - The Company has established a framework for effective management and enhancing shareholders' value through good corporate governance practices [84]. Shareholder Information - The Group's issued share capital was HK$ 18.4 million with 1,840,432,000 ordinary shares as of September 30, 2021 [48]. - The company declared an interim dividend of HK1 cent per share, totaling approximately HK$18.4 million [37]. - The interim dividend is expected to be paid on or before January 7, 2022 [86]. - As of September 30, 2021, Mr. Lo Chung Wai Paul held 1,380,000,000 shares, representing approximately 74.98% interest in the Company [57]. Future Outlook - The global economy is expected to grow by 4.9% in 2022, with Asian emerging markets growing by 6.4% [38]. - The demand for cable assembly products is expected to increase due to the large-scale replacement of 5G devices and equipment in the coming years [39]. - The growth of cloud technology is anticipated to drive the development of data centers, benefiting the company's business [40]. - The medical equipment sector is expected to maintain dynamic growth, with continued demand for medical cables [41]. - The Group expects demand for sales orders in the industrial equipment sector to gradually increase in the coming year [43].