[TK Group, 2283. HK]in 2019, the company's profit reaches HK$301.8 million, and the dividends at the year end is HK$ 9.0 cents, and the annual dividend rate is 38.7%.
TK Group(Holdings)Limited
(Stock Code: 2283)
Hold press tele-conference of 2019 performance
* * *
The company's profit reaches HK$301.8 million,and the dividends at the year end is HK$ 9.0 cents,and the annual dividend rate is 38.7%.
Two business sections,mobile phones and wearable devices, and smart home, grew rapidly
Diversified customer strategy makes business stable
[Mar. 30, 2020 – HongKong] TK Group (Holdings) Limited (Hereinafter referred to as “TK Group” or“TK”, stock code: 2283), a global leading one-stop plastics solution provider, today announced its performance for the year of 2019 at investor conference. A telephone conference was held due to epidemic, and a group of fund managers and analysts were attracted and participated in online Q&A enthusiastically.
In 2019, the industry's business environment was tested under the haze of China-US trade war. Relying on its high-quality products and technical solutions, and flexible pricing strategy, the group's revenue in 2019 stayed flat, growing 0.5% YOY to HK$2,310.8million. As most enterprises were cautious due to the impact of trade war, thegroup’s machine utilization rate declined as some customers delayed theirproduction plans. TK’s gross profit margin fell by 2.6 % to 28.9%. The profit attributable to owners of the company reduced by 13.8% YOY to HK$301.8 million.Its net profit margin slightly decreased by 2.1% YOY to 13.1%. EPS went down by14.3% YOY to HK$ 36.0 cents. The board of directors has approved the resolution to distribute dividends of HK$ 9.0 cents per share at the end of 2019. Together with an interim dividend of HK$ 5.0 cents per share, the dividend rate in the whole year of 2019 is at 38.7%.
Prospect
In the year of 2020,along with the first stage trade agreement signed between China and US, some agreements have been reached on some tariff measures and trade related policies,showing the sign of eased trade friction although the tariff and boycott have not yet been completely lifted. However, the outbreak of novel coronavirus pneumonia produced another big shock on the global economy which has just comeback to the air. As the epidemic has spread to countries in the world, the physical stores of many brands in Europe and the United States have been temporarily shut down, hitting hard the global retail market and consumer confidence. As an upstream supplier, the order sales volume of the group's customers in Europe and America will be negatively affected. The group will be have pragmatically and prudently, calmly respond to challenges, timely adjust its strategy to deal with the potential economic downside risks, and continue to improve its internal competitiveness and mitigate the impact of external environment.
Mr. Alan P. L. Li, the Chairman of TK Group, said, “It is difficult to contain the global epidemic in short term. The global trade and consumption atmosphere will remain subject to a variety of unstable factors, which will bring fluctuations and challenges to the macro-economy in 2020. To this end, the board of directors decided to postpone the building of factories overseas and adopt a more prudent attitude towards all capital expenditures to maintain capital strength and financial stability. ”He added, “TK Group will continue to maintain efficient credit and trade receivables turnover policies, stabilize cash flow and financial position, and prepare for long-term business development.”
Mr.Michael Yung, the executive director and chief executive officer of TK Group, added, “As of Dec. 31,2019, our orders in hand are HK $883.2 million. At present, Chinas epidemic situation shows signs of easing. In order to revive domestic economy, the central government has launched a number of monetary and fiscal easing measures to stimulate domestic demand. We will put more efforts to expand the product market in China, keep cooperation with more high-tech consumer electronics products, medical supplies and other brands, adhere to the strategic direction of developing diversified customers, and maintain stable business development”.
2019 Business Review
As a global leading one-stop plastics solution provider, TK Group provides customized,cost-effective and high-precision injection products and services for many international well-known enterprises. In the year of 2019, the downstream industry,smart home and mobile phones, and wearable devices, kept growing.
Manufacturing of plastic injection parts (accounting for about 74.4% of total revenue)
In 2019, the revenue of the manufacturing of plastic injection parts grew by 7.1% YOY to about HK$1,720.0million. Among them, the smart home sector continued to grow, with revenue up40.0% YOY, for the reason that the major clients of smart home launched new products in the second half year of 2019. In addition, the group has successfully developed and delivered products to another leading smart home brand in 2019,which has issued more orders for 2020. The revenue of mobile phones and wearable devices increased by 23.6% YOY, mainly due to the strong growth of orders issued by customers who provide protection shell for smart phones in the second half of the year so as to cooperate with the launching of new smartphones. Besides, the products of popular audio customers were also popular with the public, making the orders increase significantly in the year. The performance of medical and personal care sector stayed flat with that in last year, among which the leading personal care customers continued to grow, with revenue increasing by about 13.2% YOY.
In 2019, by virtue of its good reputation and past achievements in the industry, TK Group was incorporated into the supply chain by a leading domestic wearable brand to provide the latter with high-quality products and services. TK Group has also kept negotiating businesses with other leading domestic E-consumer brands and expand relevant markets.
Mould manufacturing(accounting for about 25.6% of total revenue)
The group has set up super large standard mould production line and precision mould production line.The super large standard mould products mainly produce automobile parts for the first-class parts suppliers of European automobile brands such as Benz, BMW and Volkswagen. Involved with a number of high-end electronic consumer product businesses, such as commercial communication equipment, mobile phones and wearable equipment, medical and personal care, the precision mould production line, in cooperation with the downstream injection mold component manufacturing business, brings more convenience and economic benefits for one-stop customer service offered. In 2019, the revenue of the Business Department of Mold Manufacturing was about HK$590.8 million, a decrease of about 14.7% compared with that in the same period of last year, HK$692.4 million.
Presentation of TKGroup (Holdings) Limited
TK Group (Holdings)Limited, a leading one-stop injection solution supplier in China, is devoted to the design and production of plastic injection mould and the mechanical design and manufacturing of plastic injection components. The group has more than 30years of experience in making mould. In 2015, the group was the largest exporter of plastic injection mould in China, according to an independent market survey.
With its mission “Help Customers Succeed”, the group has established a diversified customer bases from various industries, including automobile, medical and personal care, commercial communication equipment, mobile phone and wearable equipment, smart home, etc.At present, the group has 4 production bases in Shenzhen, Suzhou and Germany,with a total construction area of 150,000 square meters.
TK Group (Holdings)Co., Ltd. was listed on the main board of the Stock Exchange of Hong Kong on Dec. 20, 2013, stock code: 2283.
This press release is issued by DLK Advisory on behalf of TK Group(Holdings) Limited.