Financial Information

Latest Results Announcement


Statement of Profit or Loss and other Comprehensive Income for the quarter ended 31 December 2016

Balance Sheet



In Q4 2016, the Group's overall revenue decreased by HK$140.2 million or 35.0%, from HK$401.2 million in Q4 2015 to HK$261.0 million in Q4 2016. A breakdown of the performance by the Group's 3 business segments is as follows:

Increase/Decrease in revenue by geographical segments for Q4/2016

Gross profit and gross profit margin

In Q4 2016, the Group's gross profit decreased by 67.3% or HK$24.7 million, generating gross profit margin of 4.2% (Q4 2015: 9.1%). The breakdown according to business segments is as follows:

Other Income

The Group's other income decreased by HK$10.8 million or 63.2%, from HK$17.0 million in Q4 2015 to HK$6.2 million in Q4 2016 was mainly due to a decrease of HK$ 8.7 million for mold engineering income and HK$ 3.7 million interest income on bank deposits.

Selling and distribution expenses

The Group's selling and distribution expenses decreased by HK$2.9 million or 35.9%, from HK$8.0 million in Q4 2015 to HK$5.1 million in Q4 2016 was in line with the overall decrease in sales for the quarter under review compared to Q4 2015.

Administrative expenses

The Group's administrative expenses decreased by HK$4.9 million or 13.8%, from HK$35.5 million in Q4 2015 to HK$30.6 million in Q4 2016 mainly due to HK$4 million cost savings in Administrative Expenses as a result of group restructuring.

Finance Costs

Finance costs decreased by HK$1.4 million or 30.6%, from HK$4.5 million in Q4 2015 to HK$3.1 million in Q4 2016 mainly due to the overall decrease in bank loans.

Income Tax (Credit)/Expenses

Income tax expense decrease of HK$3.5 million or 71.1%, from HK$3.5 million in Q4 2015 to HK$0.1 million tax credit in Q4 2016, was in line with revenue decrease.

Financial position as at 31 December 2016

Non-current assets

The Group's non-current assets increased by 0.6% or HK$1.3 million, from HK$219.9 million as at 31 December 2015 to HK$221.2 million. This was mainly due to HK$46.9 million depreciation expense, HK$23.5 million translation reserve charged for RMB-denominated assets to HKD, which were partially offset by the increase in capital expenditure on property, plant and equipment of HK$71.6 million.

Current assets

The Group's current assets decreased by HK$600.9 million or 39%, from HK$1,540.9 million as at 31 December 2015 to HK$940.0 million mainly due to:

  • a decrease in pledged bank deposits of HK$431.3 million
  • a decrease in trade and bills receivables of HK$78.4 million in line with sales decrease;
  • a decrease in prepayments, deposits and other receivables of HK$63.7 million mainly due to decrease on purchase deposit paid for machinery and materials;
  • a decrease in inventories of HK$17.4 million;
  • a decrease in bank and cash balances of HK$11.6 million; and

which were offset by:

  • an increase in current tax assets of HK$1.5 million.
Current liabilities

The Group's current liabilities decreased by HK$500.5 million or 45.6%, from HK$1,097.8 million as at 31 December 2015 to HK$597.3 million mainly due to:

  • a decrease in term loans and long-term borrowings of HK$448.5 million and HK$18.4 million due to repayment arrangements in accordance with the payment schedule;
  • a decrease in trade and bills payables of HK$75.6 million, mainly due to decrease of material purchase in ODM/OEM segment;
  • a decrease in accruals and other payables of HK$24.1 million mainly due to the payment of the accruals of bonus and salary in ODM/OEM segment;
  • a decrease in current tax liabilities of HK$5.0 million; and

which were offset by:

  • an increase in short-term borrowings amounting to approximately HK$71.0 million.
Non-current liabilities

The decrease in non-current liabilities long-term borrowings is mainly due to the decrease of deferred tax liabilities.

Statement of Cash Flows for the year ended 31 December 2016

As at 31 December 2016, the Group's cash resources of HK$43.4 million are considered adequate for current operational needs. The net increase in cash and cash equivalents of HK$15.8 million held by the Group for the year comprised:

  • Net cash generated from operating activities of HK$59.7 million resulted from better management and utilization of working capital;
  • Net cash generated from investing activities of HK$362.1 million mainly due to a decrease in pledged bank deposits;
  • Net cash used in financing activities of HK$406.1 million, mainly due to the repayment of term loans.


Macroeconomic headwinds like the slowing economic growth worldwide and declining customer demands led to cautious and conservative business approaches taken by our key customers had a significant negative impact on our topline in FY2016. With significantly lower sales during the year, it is very challenging in managing fixed factory overhead and operating costs, for the lowered economies of scale. The Company therefore suffered our first full-year loss since listing in 2008.

Company's new plant in Sragen, Indonesia is currently under construction, with a pilot production run scheduled in the second half of 2017. When the new factory swings into full operation, the Company will enjoy lower costs of production and reap better economies of scale.

While improvement plans are in action, in terms of productivity enhancement and group restructuring, coupled with ongoing efforts to develop new products development and woo quality new customers, we are cautiously optimistic that operating result and financial performance will improve in FY2017 as the Company working towards a turnaround.