Analogue Records Net Profit Growth in 2021 Interim Results
Steps Up Innovation and Technical Excellence to Uphold Sustainability
Hong Kong, 26 August 2021
• Profit attributable to owners of the Company increased by 5.3% to HK$112.5 million
• Record high value of outstanding contracts in hand amounted to HK$11.9 billion, up 10.2% year-on-year
• Healthy cash position with cash balance amounted to HK$1,255.6 million
• High dividend payout ratio maintained at 50%
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 interim results for the six months ended 30 June 2021 (“the Period” or “1H2021”), achieved net profit growth despite the challenging operating environment due to the COVID-19 pandemic.
During the Period, the Group’s total revenue amounted to HK$2,333.6 million, including the contributions from Transel Elevator & Electric Inc. (“TEI”) from April to June 2020 when it was a subsidiary of the Group. Excluding the revenue from TEI, the total revenue would have recorded an increase of 3.9% year-on-year. Gross profit and gross profit margin amounted to HK$323.0 million and 13.8% respectively. Profit attributable to owners of the Company reached HK$112.5 million, up by 5.3% year-on-year. The Board has proposed an interim dividend of HK4.02 cents per share, representing a dividend payout ratio of 50%.
Leveraging its strong foundation built upon its core businesses, the Group again achieved record high value of outstanding contracts in hand at approximately HK$11.9 billion as at 30 June 2021, representing a 10.2% increase over the previous period. With the global and local economy recovering visibly, the Group has been active in tendering, submitting a total of 747 tenders or quotations which valued at over HK$1 million each during the Period.
Dr Poon Lok To Otto, Chairman of Analogue Holdings Limited, said, “In the first half of 2021, we remained vigilant in responding at scale and pace to the COVID-19 pandemic whilst putting our motto We commit, We perform, We deliver at the heart of everything we do. I believe a critical success factor throughout these challenging times is that we always look to the long-term whilst maintaining our focus on innovation and technical excellence as we build a legacy for our business. Our achievements in the first half of 2021 are a testament, not only to our efforts and capabilities but also to our management team’s vision in reading the dynamic landscape. Under the testing business environment, we maintained a steady stream of promising news, from gaining our first foothold in Europe for our lifts and escalators business to signing new contracts and engaging in several iconic projects locally, such as the new awarded projects in Kai Tak Development.”
During the Period, the Building Services segment’s outstanding contracts in hand were valued at HK$5,138.3 million. The key profit contribution for the segment included a packaged solution of Heating, Ventilation and Air Conditioning (HVAC), Electrical, Fire Services and Building Management System for a mixed-use development in Kai Tak and the provision of maintenance services of HVAC systems in metro facility at varies locations, which was supported by the Group’s 24/7 call centre. The Group has proactively been undertaking smart innovation projects in both the public and private sectors by implementing new technologies such as Modular Integrated Construction (“MiC”), Building Information Modelling (“BIM”) and Multi-trade integrated Mechanical, Electrical and Plumbing (“MiMEP”) systems. Currently, over 50% of the building services projects having adopted BIM in coordination and project management works marking a significant step forward in demonstrating its benefits in bringing construction practices into the digital age. Leveraged its pioneering technologies and market-leading position, the Group had been awarded a number of notable Grade A office building projects in Wan Chai and Central as well as installation and maintenance services for prestigious clients, including operators of railway and data centre in Hong Kong and public authorities; and operators of airport complexes, public housings and public hospitals in Hong Kong.
Environmental Engineering segment’s outstanding contracts in hand surged by 154.7% year-on-year to HK$5,268.4 million, mainly attributable to the increased number of environmental infrastructure projects in support of the government’s announcement to improve environmental protection outlined in the 2020-21 budget. During the Period, the Group won contracts from the government departments for E&M works of water supplies and drainage services, ranging from maintenance to contracting works. Leveraging the proprietary technologies and a strong track record, the Group also actively sought overseas business opportunities, involving in tendering activities for works outside Hong Kong and the Mainland China. At the same time, the Group has stepped up its investment in value-added initiatives and developed the Digital Twin technology to optimise the chemical usage and operation efficiency at designated water and wastewater treatment plants.
During the Period, the Information, Communications and Building Technologies (“ICBT”) segment’s outstanding contracts in hand were up 5.5%, valued at HK$936.9 million. The Group continued to utilise green and intelligent building solutions to contribute to the development of a “Smart City” and “Smart Economy”. Hence, the Group has introduced a wide range of ICBT applications, including an in-house developed Cloud-based AI Energy Management Platform and a newly developed smart “Internet of Things” (IoT) applications such as Smart Washrooms, Retro-commissioning (RCx), Indoor Environmental Quality (IEQ) Monitoring, Indoor Positioning and Video Analytics, resulted in orders secured by the Group. These include the first Automatic Guided Vehicle (AGV) smart parking installation successfully completed and commenced operation in 2021 in support of Smart Mobility in the city. Further business opportunities are expected to be unleashed in the near future.
The Lifts and Escalators segment’s outstanding contracts in hand amounted to HK$526.3 million. The Group has developed an in-house technology utilising IoT and big data analytics in predictive maintenance of lifts and escalators and other applications such as fault diagnosis of electrical and mechanical systems, which helps the Group to maintain the high quality of services and ensure the safety. As a global brand whose lifts, escalators, and moving walkways are serving millions of users in Asia, the Americas, and Europe. Armed by its high-end technology implementation, it is also worth noting that Analogue has won first place in “Escalator: modernisation” category of Elevator World’s “2021 Project of the Year” contest for the Central-Mid-Levels Escalator and Walkway System modernisation project, being the only company from Asia on the winners list. The Group was also awarded the first “Puzzle Stacking System Carpark” in Hong Kong, under the new Lifts & Escalators Ordinance; maintenance contract of escalators for government buildings, and the automatic carparking system of a public complex in Kai Tak during the Period. In addition, the Group expected to incur RMB60 million to expand the Nanjing factory facilities to enhance the production capacity for Lifts & Escalators to meet the anticipated demand and growth of the business.
Despite the ongoing COVID-19 pandemic and various geopolitical uncertainties including the US-China trade tensions, the outlook for the construction industry and the Group remain positive as the Hong Kong Government is pledging its support to invest in infrastructure projects, including a plan to increase the annual capital works expenditure on the supply of 430,000 housing units in the coming 10 years and an expenditure of HK$200 billion as part of the 10-year Hospital Development Plan. In addition, with expertise in the development and adoption of innovative construction technologies, the Group is well positioned to capture the increasing market demand for upgrading or replacing systems in existing buildings and the tremendous opportunities from the Government’s Smart City initiative.
Dr Otto Poon concluded, “As a leading player in the industry, we have been taking the lead to support the adoption of innovative construction technologies in coordination and project management works, constituting a significant step towards the digital transformation of our construction industry. Looking ahead, we will continue to utilise our local expertise to expand our presence globally and in other business segments that are close to our core business, aiming to ultimately achieve sustainable growth and create long term value for our shareholders.”
For more details of the 2021 Interim 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.