Mainboard-listed Valuetronics Holdings has recorded earnings of HK$187.1 million ($31.9 million) for the FY2021 ended March, up 4.6% y-o-y from $178.9 million previously.
This translates to earnings per share (EPS) of 43 HK cents, up from 41.2 HK cents previously.
Revenue for the FY2021 dipped by 3.1% y-o-y to HK$2.3 billion from $2.4 billion previously, primarily driven by lower revenue from consumer electronics, which dipped 25.7% y-o-y to HK$680.7 million on weak customer demand and a scheduled production switch over from China to another ASEAN country.
However, this was partially offset by higher revenue from commercial & industrial electronics which increased by 11.3% y-o-y for the FY2021 to HK$1.6 billion due to a surge in demand for logistics and e-commerce, which benefited several key customers. In addition, a customer who had plans to switch vendors from Valuetronics delayed their plans due to the pandemic, resulting in continued orders for FY2021.
Nonetheless, Valuetronics says it saw a rebound in customer demand in the second half of the year, which kept revenue and profits relatively stable for the full year, despite a weaker first half.
Despite the lower revenue, Valutronics’ gross profit for the FY2021 increased 6.5% y-o-y to HK$386.2 million following a higher gross profit margin of 16.9% for the year from 15.4% previously which the group attributes to a change in product sales mix.
Administrative expenses dipped 0.5% y-o-y to HK$163.3 million, while selling and distribution expenses increased by 21.4% to HK$32 million, mainly due to an increase in product warranty expenses.
In addition, the group’s other income decreased by 25.4% to HK$18.4 million, mainly due to the decrease in interest income, but this was offset by an increase in net exchange gains
To that end, the group’s operating profit for the FY2021 increased 6.3% y-o-y HK$209.4 million.
SEE:Analysts foresee tough outlook for Valuetronics; RHB warns of future dividend cut
Valuetronics’ cash and cash equivalents stood at HK$1.1 billion as at March 31, while net asset value stood at HK$3.1 per share.
Valuetronics is recommending a final dividend of 16 HK cents per share. Including the interim dividend of 5 HK cents per share paid in December 2020, the total dividend per share (DPS) comes to 21 HK cents for the FY2021, representing 48.9% of earnings.
In comparison, Valuetronics paid an interim and final dividend per share of 5 HK cents and 14 HK cents respectively in FY2020 for a total DPS of 20 HK cents.
Looking ahead, the group says it is expecting “significantly lower” results for FY2022, given Covid-19-driven uncertainties and volatility, supply chain issues, and a loss of orders resulted from customers switching their supply chain to other countries due to Sino-US trade tensions.
Nonetheless, Ricky Tse Chong Hing, chairman and managing director of Valuetronics, says the company remains focused on completing its Vietnam campus. “[Our] Vietnam expansion is proceeding according to schedule during the year. We are targeting the new Vietnam campus to commence production by the end of FY2022,” he says.
“By then, we will be fully equipped to serve customers’ multi-site production strategy as a means to mitigate Sino-US trade tensions, and we will be seeking out new opportunities emerging with our extended geographic footprint,” he adds.
Shares in Valuetronics closed 1.5 cents or 2.4% higher at 64 cents on May 28.
