Analogue Achieves Revenue and Profit Growth in FY2020
Innovation and Global Expansion for Sustainable Growth
Hong Kong, 29 March 2021
• Total revenue increased by 14.4% to HK$5,125 million
• Revenue from maintenance work rose by 29.8% year-on-year
• Profit attributable to owners of the Company reached HK$301 million
• Satisfactory order intake in 2020 valued at HK$7.6 billion
• Record high value of outstanding contracts in hand amounted to HK$11.8 billion, up 25.9% year-on-year
• High dividend payout ratio maintained at 50.3%
Analogue Holdings Limited (“Analogue” or the “Company”, together with its subsidiaries, collectively the “Group”) (stock code: 1977), a leading electrical and mechanical (“E&M”) engineering service provider in Hong Kong with operations in Macau, Mainland China, United States and United Kingdom, today announced the annual results for the year ended 31 December 2020 (“the Year” or “FY2020”), demonstrating resilience under the unprecedented challenges brought by the COVID-19 pandemic with sustained growth in both revenue and profit.
During the Year, the Group’s total revenue increased by 14.4% to HK$5,125 million year-on-year, mainly attributable to the Building Services and Lifts and Escalators segments. In particular, revenue from maintenance contracts, a rising source of recurring revenue for the Group, rose by 29.8% to HK$882 million. Gross profit increased by 15.6% to HK$909 million, with gross profit margin at 17.7%. Profit attributable to owners of the Company was HK$301 million, with net profit margin improved to 5.9%. The Board has proposed a second interim dividend of HK7 cents per share. Together with the first interim dividend of HK3.82 cents per share, the total dividend for the Year amounted to HK10.82 cents per share, representing a dividend payout ratio of 50.3%.
In FY2020, the Group achieved another record high value of outstanding contracts in hand, including contracting work, maintenance work and sales of goods, amounting to approximately HK$11.8 billion, up by 25.9% year-on-year. The Group has also secured a total order intake of HK$7.6 billion.
Dr Poon Lok To Otto, Chairman of Analogue Holdings Limited, said, “In 2020, the COVID-19 pandemic brought disruptions, challenges and risks in an unprecedented scale to people’s lives, businesses and governments worldwide. Nonetheless, with our leadership and over 40 years of experience in the E&M industry, the Group has ended the financial year on a positive note. The performance is a clear testament to the effectiveness of our New Technology, New Market and New Business Model strategies, even in the face of such testing environment. In addition to our strong foundation, our competitive advantages in innovation and research and development can also take credit for our positive performance.”
During the Year, the Building Services segment’s outstanding contracts in hand were valued at HK$5,347 million. In the reporting period, the Group completed a smart living and co-creation space project in Pak Shek Kok, the first completed project in Hong Kong adopting Modular Integrated Construction (MiC). Another project adopting MiC completed by the Group was a temporary quarantine facility on Lantau Island, a fast track project finished in less than three months. Such projects strengthened the Group’s competence in MiC project management. Good progress was also made in the development of ATAL Building Services Prefabrication and Modularisation Construction Technology (ABSPM). The Group is ready to apply these technologies to its on-going and future projects with enhanced work quality, safety and productivity. Leveraging multi-disciplinary capability, the Group took part in various key infrastructure tenders in the reporting period, and the tender results including those for airport enhancements and multiple healthcare facilities are expected to be announced in the first half of 2021.
Environmental Engineering segment’s outstanding contracts in hand were valued at HK$5,039 million as at 31 December 2020, representing an increase of 115.8% year-on-year. The advanced treatment processes proprietary to the Group continued to be its competitive edge in the Mainland China market. Of the seven contracts secured in the market during the reporting period, two employed the Group’s self-developed containerised Magnetic High Rate Clarifier AMSFS II and Biological Aerated Filter ABAF. The segment also rendered maintenance and operation services to existing environmental facilities of government clients, utility companies and public organisations in Hong Kong, generating stable revenue for the Group.
During the Year, the Information, Communications and Building Technologies (“ICBT”) segment’s outstanding contracts in hand were valued at HK$854 million. The Group actively promoted the self-developed Smart IoT Building Platform and Cloud-based AI Energy Management Platform to the market. These two platforms, available on monthly subscription basis, have impressed reputable clients, many of whom have already placed orders while others are considering further orders. The Group offered a wide range of maintenance works for BMS, ELV systems, and automatic passenger and vehicle clearance solutions to government clients, commercial premises and public organisations in Hong Kong. On smart mobility front, in addition to the Group’s first Automated Guided Vehicular (“AGV”) smart parking project completed during the Year, new orders for smart sensors at parking spaces, for providing real-time parking vacancy information, were secured during the Year. Currently, the Group is also pursuing Free Flow Tolling, Electronic Road Pricing and other intelligent transport business opportunities.
The Lifts and Escalators segment’s outstanding contracts were valued at HK$607 million. Highly commended by clients, the maintenance services of the segment continued to develop, catering to the needs of government clients, offices, residential buildings, amusement parks and public organisations in Hong Kong, and maintaining consistently the highest safety and quality performance rating. During the Year, the segment expanded its global presence to the US and the UK market through the alliance with Transel Elevator & Electric Inc. (TEI) and the establishment of its first company in the UK. Moving forward, with these new footholds, the Group will accelerate penetration into their respective markets. New agreements with distributors in Eurasia and Eastern Europe regions were also signed to further grow its distribution network. Moreover, the Group will continue to explore suitable overseas acquisition opportunities. To support these global opportunities, the Group has been expanding its manufacturing plant, which is expected to be completed by 2022.
Even though COVID-19 and the global trade tensions will continue to present uncertainties to the economy, the Group sees plenty of growth opportunities ahead owing in part to the Hong Kong SAR Government’s commitment to public expenditure and the development of large-scale private projects, including developments in Kai Tak, Tung Chung and Kwu Tung North. Furthermore, other infrastructure projects that are set for roll out in Macau; the development of strategic technologies and digital infrastructure, the demand for upgrading existing wastewater treatment plants, and the continuous urbanisation in Mainland China will create ample opportunities for the Group.
Dr Otto Poon concluded, “With our strong foundation in our four core business segments and strategic coverage across the world, we will continue to deploy proven technologies and step up innovation to meet customer needs in the post-pandemic era. In Hong Kong, there will be exciting opportunities in the public and private sectors for the E&M industry in the coming few years, and we will increase the contributions from the maintenance business for a source of recurring revenue. Outside of our home, we believe that the Environmental Engineering and Lifts and Escalators business will capitalise on international opportunities and become a growth driver. We will remain on the lookout for suitable overseas opportunities and joint venture partners to widen the scope and geographical footprint of our business. With emerging market opportunities and our effective strategies in place, we are confident of achieving long-term sustainable growth in the future.”
For further details of the 2020 Annual Results, please refer to the announcement that has been filed with The Stock Exchange of Hong Kong Limited.
About Analogue Holdings Limited
Established in 1977, Analogue Holdings Limited is a leading electrical and mechanical engineering service provider headquartered in Hong Kong, with operations in Macau, Mainland China, the United States and the United Kingdom. Serving a wide spectrum of customers from public and private sectors, the Group provides multi-disciplinary and comprehensive E&M engineering and technology services in four major segments, including Building Services, Environmental Engineering, Information, Communications and Building Technologies (“ICBT”) and Lifts & Escalators.
The Group also manufactures and sells Anlev lifts and escalators internationally and has entered into an alliance with Transel Elevator & Electric Inc., one of the largest independent lifts and escalators companies in New York, the United States. The Group’s associate partner, Nanjing Canatal Data Centre Environmental Tech Company Limited (603912.SS), is specialised in manufacturing of precision air conditioners.