Analogue’s Net Profit Increases by 301.4% to HK$237.5 Million in First Half of 2023
Ready to Capture Tremendous Opportunities in Post-Pandemic Era
Leverage Innovation and “Go Global” Vision to Drive Sustainable Development
Hong Kong, 25 August 2023
- High contracts-in-hand at HK$12,276.0 million
- Gross profit margin improved to 16.0%
- Profit attributable to owners of the Company increased by 301.4% year-on-year to HK$237.5 million
- The Board has resolved to pay an interim dividend of HK8.52 cents per share, maintaining a payout ratio of 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, today announced its interim results for the six months ended 30 June 2023 (“the Period”), highlighted by the substantial growth in net profit and high value of contracts-in-hand.
During the Period, the Group’s revenue was HK$2,841.1 million and gross profit was HK$453.8 million, while gross profit margin improved to 16.0%. Profit attributable to owners of the Company for the Period was HK$237.5 million. Excluding the dilution gain of HK$124.1 million upon completion of a private placement of an associate of the Company in Mainland China, the Group’s consolidated profit attributable to owners of the Company for the Period was HK$113.4 million. The Board has resolved to pay an interim dividend of HK8.52 cents per share, representing a dividend payout ratio of 50%.
The Group maintained high contracts-in-hand of HK$12,276.0 million as at 30 June 2023, laying a strong foundation for the future development of its core businesses. Tendering activities remained active, with a total of 570 tenders or quotations valued at over HK$1 million each submitted during the Period.
Dr Otto Poon Lok-to, Chairman of Analogue Holdings Limited, said, “While the global macroeconomic headwinds have persisted, the relaxation of COVID-related measures has provided one ray of light. Market anxiety has gradually given way to guarded optimism as the post-pandemic era has commenced. As for the Group, we have continued to direct efforts towards generating recurring revenue streams by leveraging our diversified business operations, leading position and technological strengths. With our three strategic pillars of ‘New Technology’, ‘New Market’, and ‘New Business Model’ underpinning our position in the industry, we are well-placed to seize new opportunities across different markets.”
Building Services segment had contracts-in-hand valued at HK$6,150.3 million as of 30 June 2023. Total value of new contracts received during the Period was HK$2,460.5 million. The Building Services segment continued to deliver on the order book with revenue recorded at HK$1,748.0 million. In particular, recurring revenue streams from infrastructure operations, data centres and housing programmes were strengthened by new maintenance contracts of HK$548.6 million secured in the Period, representing a year-on-year increase of 313.1%. Highlighted by its industry leadership position and solid reputation, the Group’s data centre team had notable success in securing a number of key projects valued at over HK$608.7 million, representing an increase of 98.2% over the same period in 2022. The Group has also commenced a number of large-scale data centre projects for a major data centre service provider in Hong Kong. Leveraging the Group’s significant role in a number of large-scale projects in Macau, it is currently executing a major contract for a sizeable hotel development. As the Hong Kong Government stated that it is committed to sustainable urban development with significant investments in housing and infrastructure, and announced that it plans to build 30,000 Light Public Housing units, the Group will continue to adopt new technologies to capture the emerging market opportunities.
Environmental Engineering segment had contracts-in-hand valued at HK$4,598.9 million, including seven new contracts or significant variation orders that underscore its expertise in project management services for quality water, wastewater, and solid waste infrastructure. The segment’s revenue for the Period was HK$622.5 million, representing year-on-year growth of 24.6%. Having introduced a number of innovative models for wastewater treatment plants to extend their lifespan and ensure optimal serviceability, the Group’s environmental engineering team currently offers Engineering, Procurement, and Construction (“EPC”) and turnkey solutions to further enhance the Group’s competitiveness. Leveraging these competitive strengths, the Group participated in operation and maintenance projects for E&M works to enhance water, sewage and solid waste management. With the Group’s commitment to innovation, it is worth noting that its in-house developed ATAL Multi-Stages Flocculation Sedimentation III, an all-in-one wastewater treatment system that leverages the latest construction technologies, has achieved “Certificate of Merit” in the “Hong Kong Green Innovations Awards” organised by the Environmental Campaign Committee. The award is a testament to the Group’s contributions to green innovation, resulting in tangible benefits to the environment and the community.
Information, Communications and Building Technologies (“ICBT”) segment had HK$940.8 million of contracts-in-hand as of 30 June 2023. Revenue for the ICBT segment increased by 2.5% year-on-year to HK$310.9 million, thanks to its stable order book. Committed to driving the transformation of Hong Kong into a “Smart City” and “Smart Economy”, the Group provides green and intelligent building solutions that integrate a wide range of information and communications technologies, including AI-enabled Digital Twin, energy and management technologies, Environmental, Social, and Governance (“ESG”) dashboards, Indoor Environment Quality (“IEQ”) Management, robotic solutions, and Smart Lampposts. The Group’s cutting-edge technologies continue to make waves in Hong Kong’s prestigious business districts. Its integrated Building Management System (“BMS”), Internet of Things (“IoT”), Extra Low Voltage (“ELV”) system, and Information and Communications Technology (“ICT”) systems have been adopted in a world-class smart office and commercial building that is currently under construction in Causeway Bay. Other achievements included securing the Group’s second IoT-based smart hostel solution at one of the universities in Hong Kong; the Group’s Video Analytics technology being selected by one of the biggest shopping malls in Tai Wai; and its BMS being chosen by one of the biggest office and retail developments in the West Kowloon Station area, all of which showcase the Group’s commitment to providing innovative solutions to customers. In view of the growing market demand for such specialised solutions, the Group will continue to adopt digital technologies to enhance its maintenance service capabilities.
Lifts and Escalators segment’s contracts-in-hand increased by 13.7% to HK$586.0 million. Maintenance contracts for both commercial and government buildings were major profit contributors during the Period. Anlev Elevator Group (“Anlev”), the Group’s global brand of lifts, escalators and moving walkways, serves millions of users across Asia, the Americas and Europe. Under its global expansion plan, Anlev secured strategic orders ranging from mixed-use residential building in Canada, public transportation in Mexico, private housing in Singapore, prestigious government offices in Hong Kong, to orders in Mainland China. The Group’s wholly-owned subsidiary Anlev (UK) Limited has finalised the order for an iconic and prestigious residential project in Manchester, United Kingdom (“UK”). The Group is striving to explore suitable synergistic business partnerships to further expand its reach and create new revenue streams, enabling it to expand its presence in the UK market and provide more comprehensive services to customers. Anlev will also seek new distributors in the United States, Europe, the Middle East and Southeast Asia to further its global expansion plan.
“Leveraging our strong foundation in core businesses, we are mindful of promoting synergies across business segments to enhance profitability and efficiency,” added Dr Poon. “In fuelling our growth, we have established a new business development unit, Smart Data Automation, during the Period. The unit is expected to provide strong support for our core businesses in exploring digital business development opportunities. Coupled with the Group’s capabilities to innovate and support environmental sustainability to assist businesses in achieving their ESG targets, we are ready to sail and stay ahead of the game.”
As reflected in the Group’s strong tender activity throughout 2023, the Group sees positive business outlook for the year ahead which is driven by high market demand and growth opportunities across different market segments. As the Hong Kong Government’s initiatives in innovation and sustainability present exciting business opportunities, the Group is well-positioned to leverage proprietary technologies developed by its research and development team to bring significant benefits to customers and the community, such as energy-efficient buildings, digital solutions for improved operational efficiency, enhanced healthcare and other service delivery. The Group’s continued success in securing new business opportunities and winning contract tenders provides a good foundation for it to remain competitive in the industry while expanding its revenue, customer base and market reach.
Dr Poon concluded, “As we look ahead, the latest projections made by the Construction Industry Council will be of interest to all industry players. Specifically, the total annual construction output in Hong Kong is projected to reach approximately HK$300 billion annually in the next ten years. We believe these aforementioned factors, plus the reopening of borders, are among the key contributors to the upsurge in opportunities presented to the Group, all of which we are well-prepared to grasp in our drive to achieve organic growth. The rise of environmental concerns around the globe represents yet another important opportunity. We will capitalise on these developments as part of our ‘Go Global’ initiative and business expansion drive, and continue to create shared value for our stakeholders.”
For more details of the Group’s 2023 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 (“E&M”) 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. (“TEI”), 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), specialises in manufacturing of precision air conditioners.