Analogue Holdings Limited Announces First Interim Results
Hong Kong, 28 August 2019
Strives for Excellence in Innovation, Sustainability, Quality and Efficiency
- Revenue amounted to HK$2,079.3 million, net profit attributable to shareholders amounted to HK$107.8 million
- Satisfactory order intake in 1H 2019 of value HK$3.52 billion, an increase of 31% YOY
- Outstanding contracts in hand of all four business segments increased to HK$8.87 billion, an increase of 23% YOY
Analogue Holdings Limited (“Analogue” or the “Company”, together with its subsidiaries collectively as the “Group”) (stock code: 1977) has announced today its first interim results for the six months ended 30 June 2019 (“the Period”) since its listing on the Main Board of The Stock Exchange of Hong Kong Limited (“HKEX”) on 12 July 2019.
For the period under review, the Group recorded revenue of HK$2,079.3 million and gross profit of HK$364.9 million, with gross profit margin increased 1.1% to 17.5%. During the first half of 2019, the Group has put in great effort to replenish and build its order book, following a year of record high business turnover in 2018. Within the Period, a total of approximately 637 tenders or quotations each of an individual value of over HK$1 million had been submitted, among them approximately 150 tenders and quotations were awarded with the total value of approximately HK$2.91 billion. It was particularly encouraging that all four business segments, namely Building Services, Environmental Engineering, Information Communication and Building Technology (ICBT), and Lifts and Escalators, have recorded an increase in outstanding contracts in hand as compared to the corresponding period in 2018, with an overall value of approximately HK$8.87 billion (including contracting work, maintenance work and sales of good), representing an increase of approximately HK$1.66 billion year-on-year.
Dr. Poon Lok To Otto, Chairman and Executive Director of Analogue Holdings Limited, said, “The listing on the Main Board of The Stock Exchange of Hong Kong Limited earlier this year marked a major milestone for the Group. The successful listing has undoubtedly provided an effective platform for furthering our future development and expansion in the market, as well as recognised the Group’s leading position as the largest E&M engineering service provider in Hong Kong with over 40 years of experience in providing multi-disciplinary and comprehensive E&M engineering and technology services to a wide range of projects and sectors in Hong Kong, Macau and Mainland China. During the Period, we have secured numbers of new projects across four business segments, including those requiring innovation and technology. We will continue our cooperation with universities on research and development across disciplines for more innovative applications for business growth, thus enabling us to capture the immense opportunities set to come.”
The Building Services segment remained the principal business and the key revenue generator of the Group, contributing HK$1,290.1 million in revenue for the Period, with its capability encompassing the design, installation, testing and commissioning and maintenance of various systems including the Heating, Ventiliation and Air-Conditioning (HVAC), fire services, and plumbing and drainage, with customers in Hong Kong, Macau and mainland China.
During the Period, the Group secured the contract for the combined electrical and mechanical services installation of the Science Park InnoCell development project at Pak Shek Kok, which is one of the first projects in Hong Kong adopting the latest construction technology of Modular Integrated Construction (MiC). The Group also invested in innovative construction technologies and built up a strong capability in Building Information Modelling (BIM) which enables the Group to deliver projects in a better coordinated and more professional manner in the design, planning and construction stages. The Group also actively partnered with reputable main contractors to tender for infrastructure related projects, in order to maintain a favourable position for the Group to bid for other sizable third runway related projects of Hong Kong International Airport in the second half of 2019.
The environmental engineering segment, which provides total solutions for the design, construction, operation and maintenance of environmental engineering systems and treatment plants, contributed revenue of HK$450 million for the Period.
The Group’s strong technological expertise and proven track records in project delivery set it apart from competitors. During the Period, the Group obtained a new patent in mainland China named “A system to inject gel material into a kiln (一種膏狀物料焚燒入窑裝置)” which enhances the performance of incineration process and produces cement from sludge. These inhouse advanced treatment processes give the Group a competitive edge not only for bidding tenders in Hong Kong but also tapping into the vast mainland China market which has set stringent environmental control standards and ambitious national environmental targets under its current five years plan.
Information, Communication and Building Technology (“ICBT”)
Riding on the Hong Kong Government’s initiative to encourage “Smart City” development, ICBT segment is missioned to offer solutions to help build green and intelligent buildings and make Hong Kong a smart city through integrating a wide range of information and communication technologies with building energy and management technologies. During the Period, the segment recorded revenue of HK$215.6 million.
The Group’s self-developed Cloud-based Chiller Plant Energy Management Platform has won the Silver Award in Smart Business (Big Data and Open Data Applications) in the Hong Kong ICT Awards 2019, followed by a number of related orders received from reputable customers. The Platform was proved to be able to provide about 10% further energy savings for the Beam Plus Platinum rated office building’s chilled water system. On top of the existing services under the ICBT business, the Group is also actively developing and growing business in new areas such as retro-commissioning of building services in existing buildings and Internet of Things (“IoT”) infrastructure installation for new and existing buildings.
Lifts & Escalators
The lifts & escalators segment which includes design, manufacture (under the trade name of “Anlev”), sales, installation and maintenance of various lifts, escalators and moving walkways meeting different purposes and requirements, continued to see a steady growth in order intake, revenue and gross profit. In additon to general installation and maintenance projects, the segment had secured orders for modernisation of 43 lifts and completed 32 installations over the reporting period, and generated an improved revenue of HK$123.5 million for the Period.
Anlev Elex Elevator Ltd, the Group’s wholly owned subsidiary, has obtained the highest rating in safety and quality performance for 26 consecutive quarters for both the Lift Contractors’ Performance Rating and Escalator Contractors’ Performance Rating systems of the Hong Kong Electrical and Mechanical Services Department since the commencement of the systems in January 2013.
The Group had completed its first retrofit project in Hong Kong for highly constrained sites where access is very limited during the first half of the year, and sees a big market globally for similar escalator installation. With eyes on both local and oversea markets and capitalising on its outstanding performance ratings in safety and quality, the Group had been awarded its first order in Mexico and Portugal during the Period, while new distributorship agreements in Eurasia and Eastern Europe regions had been signed.
Against the backdrop of the multitude of market factors locally and globally, the Group managed to secure a satisfactory value of order intake and maintained a comfortable level of outstanding contracts in hand during the Period. It is foreseen that there will be a healthy pipeline of tenders, including many big ones, that will come out for tendering in 2H 2019 and beyond.
Looking ahead, the Group will remain vigilant and place priority first and foremost on bolstering its four business segments while developing innovative solutions, processes and technologies for capturing new market opportunities. Meanwhile, the Group is actively exploring merger and acquisition opportunities to facilitate its business growth horizontally, vertically and geographically. Preliminary enquiries to companies in South East Asia and North America on building services and lifts and escalators segments had been made.
With the Group’s strong commitment and continuous investment in innovation, technology, process improvement and people development, we are confident in harvesting material benefits of improved productivity and competitiveness and opening of new business opportunities, which the Group believe will further strengthen its market leadership position and translate into increased shareholder value in the foreseeable future.
About Analogue Holdings Limited
Established in 1977 and headquartered in Hong Kong, the Group is the largest E&M engineering service provider in Hong Kong in terms of revenue in 2018, with substantial operations in Macau and Mainland China. The Group provides multi-disciplinary and comprehensive E&M engineering and technology services in different segments, including Building Services engineering, Environmental Engineering, ICBT and Lifts & Escalators to a wide spectrum of customers from the banking, property development, education, entertainment, hospitality, information technology, data centres, transportation and utilities sectors, as well as departments of the Hong Kong SAR Government. The Group also manufactures and sells lifts and escalators internationally. Nanjing Canatal Data Centre Environmental Tech Company Limited, an associate of the Group, has been listed on the main board of the Shanghai Stock Exchange since November 2017.
 Source: Frost & Sullivan, in terms of revenue in 2018