Tag: Analogue Holdings Limited

Strives for Innovative Development and Overseas Expansion for Sustainable Business Growth

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 and United States, today announced the interim results for the period ended 30 June 2020 (“the Period” or “1H2020”), demonstrating sustainable business growth under the adverse market situation. During the Period, despite the challenging macro-environment due to the COVID-19 pandemic, the Group’s total revenue rose by 17.4% to HK$2,441.1 million year-on-year, with the revenue growth across all business segments, namely Building Services, Environmental Engineering, Information, Communications and Building Technologies (“ICBT”), and Lifts and Escalators. The overall maintenance contracts rose by 39.1%. Gross profit increased by 11.6% to HK$407.4 million, with gross profit margin at 16.7%. Profit attributable to owners of the Company reached HK$106.9 million. The Board has proposed an interim dividend of HK3.82 cents per share, representing a dividend payout ratio of 50%.

Highlights
– Total revenue increased by 17.4% to HK$2,441.1 million
– Profit attributable to owners of the Company reached HK$106.9 million
– Satisfactory order intake in 1H2020 valued at HK$2.6 billion
– Record high value of outstanding contracts in hand amounted to HK$10.8 billion, up 21.4% year-on-year

In 1H2020, the Group was awarded 155 tenders at a value totalling approximately HK$1.9 billion. All four business segments achieved a record high value of outstanding contracts in hand, including maintenance works, contracting works and sales of goods, amounting to approximately HK$10.8 billion, up by 21.4% compared to the same period last year. The Group has also secured a total order intake of HK$2.6 billion.

Dr Poon Lok To Otto, Chairman and Executive Director of Analogue Holdings Limited, said, “The first half of 2020 saw some very challenging times with the COVID-19 pandemic stifling economic activities worldwide. We are pleased to see that our tremendous efforts put into businesses had achieved reward with an order book of record high amount. During the Period, the Group was dedicated to improving the maintenance business which is less susceptible to the ups and downs in the economic cycle and construction cycle of large contracting projects, and thus able to provide a stable income stream. We will adhere to pursuing the New technology, New Market and New Business Model strategies to capture new orders and market opportunities, while strengthening our leading position in the market to fuel sustainable growth of the Group.”

During the Period, revenue of the Building Services segment rose by 4.7% year-on-year to HK$1,350.5 million. Value of outstanding contracts in hand increased by 19.7% year-on-year to HK$6,028.5 million as at 30 June 2020. The Group has continued to invest in developing innovative and new technologies for applications. Leveraging its integrated Building Information Modelling (“BIM”) technology, the Group was able to develop prefabrication and modular construction for E&M works. Its proprietary ATAL Building Services Prefabrication & Modularisation Construction Technology (“ABSPM”) has been adopted in the Fu Shan Public Mortuary project which is making good progress with prefabrication and modular units in the production stage. Modular Integrated Construction (“MiC”) was adopted for the first time in the InnoCell project for the Hong Kong Science and Technology Parks, which is expected to be completed by the end of 2020. Other upcoming contracts will continue to adopt similar innovative construction methods to enhance safety, quality and productivity of the projects.

Environmental Engineering segment recorded a revenue of HK$498.8 million during the Period, representing a year-on-year growth of 10.8%, with value of outstanding contracts in hand at HK$2,068.1 million as at 30 June 2020. The Group won six contracts in mainland China to upgrade existing plants already using its technologies to comply with the new environmental standards in the country. A sewage treatment project was also secured in Vietnam, the second of such projects undertaken outside Hong Kong and mainland China. The Group also participated in establishing a new standard of advanced sewage treatment called “Fenton Oxidation Process for wastewater treatment” included in the environmental protection standards of the PRC. This achievement will open the Group to more business opportunities for providing services to high concentration organic wastewater treatment facilities.

During the Period, the ICBT segment recorded a revenue of HK$241.3 million, up 11.9% year-on-year. Value of outstanding contracts in hands reached HK$887.8 million, representing an increase of 35.5% year-on-year. Analogue actively promoted a self-developed Cloud-based AI Energy Management Platform to the market. This monthly subscription platform has caught the eyes of many reputable clients, some of whom have already placed orders while others are discussing further orders. The Group also actively promoted intelligent transport and has received its first order on Automated Guided Vehicular (“AGV”) smart parking system and has progressed to the installation stage. The Group is also pursuing Free Flow Tolling, Electronic Road Pricing and other intelligent transport business opportunities.

Leveraging the highest safety and quality performance ratings among the Lift and Escalator Contractors by the Hong Kong Electrical and Mechanical Services Department (“EMSD”), the Lifts & Escalators segment continued to see huge growth in order intake. The segment recorded a revenue growth of 183.8% to HK$350.6 million during the Period, with value of outstanding contracts up 345.6% to HK$1,784.4 million. In 1H2020, the Group received the second order from Hong Kong Housing Authority (“HKHA”), the single largest customer in the lift market in Hong Kong, after the first order won in 2019. Furthermore, new agreements were signed with distributors in Eurasia and Eastern Europe regions. The Group will continue to actively pursue overseas markets and support its overseas distributors in bidding for projects, including metro or railway tenders in South Korea, Australia and Mexico. In March 2020, the Group entered into an alliance with Transel Elevator & Electric Inc., (“TEI”), one of the largest independent lift and escalator companies in New York, United States. Going forward, the Group will explore other promising opportunities of overseas acquisitions.

Dr Otto Poon concluded, “The second half year is expected to remain under the cloud of COVID-19. Nevertheless, we remain confident in the Group’s capability to harness opportunities amid adversity, particularly as there remain a variety of new prospects from both the public and private sectors. On top of striving for organic growth by constantly taking our technologies and skills to higher levels, we see merger and acquisition of businesses with strengths complementary to our own as an effective way to quickly grow our business. This together with identifying partners and joint venture opportunities for the different business segments, they will enable the Group to widen the scope and geographical footprint of its business. With eyes set on fortifying our market leadership and maximising return to shareholders, we will continuously invest in innovation and technology, process improvement and talent development, so as to heighten productivity and competitiveness for seizing new business opportunities.”

For further details of the 2020 Interim Results, please refer to the announcement that has been filed with The Stock Exchange of Hong Kong Limited.
https://doc.irasia.com/listco/hk/analogue/interim/2020/int.pdf

About Analogue Holdings Limited
Established in 1977 and headquartered in Hong Kong, the Group is a leading E&M engineering service provider in Hong Kong with operations in Macau, mainland China and United States. The Group provides multi-disciplinary and comprehensive E&M engineering and technology services in different segments, including Building Services, Environmental Engineering, ICBT and Lifts & Escalators to a wide spectrum of customers from public and private sectors. The Group also manufactures and sells Anlev lifts and escalators internationally and owns 49% equity interests of 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.

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 and mainland China, today announced the acquisition of 51% of equity interests in Transel Elevator & Electric Inc. (“TEI”) with an aggregate consideration of US$35.7 million, equivalent to approximately HK$278.46 million, setting its first foothold in New York, the United States of America (“USA”). Upon Completion, TEI will become an indirect non-wholly owned subsidiary of the Company.

Dr. Poon Lok To Otto, Chairman of Analogue Holdings Limited, said, “We are pleased to announce the acquisition of TEI, another significant initiative of the Group. Over the years, we have been sparing no effort to expand our lifts and escalators business and created our own brand Anlev. Aligning with the vision of TEI, we believe the acquisition will strengthen our customer base in the industry and allow us to better execute the New Technology, New Market and New Business Mode strategy. It is also expected to create synergies across our other business. Furthermore, being able to set foot in New York will definitely act as a stepping stone to expand our business in USA and ultimately on a global basis, capturing the abundance of opportunities. Looking forward, while uncertainties in the economy continue to prevail, we will monitor the market with caution to enhance our profitability and achieve continuous growth.”

Since the Group’s successful listing last year, it has been actively seeking new opportunities to further strengthen all aspects of its business segments. According to the Elevator Report 2017 issued by the New York City Department of Buildings, New York has approximately 84,000 elevators, claiming to be the largest stock in North America and with the oldest stock in the world. In view of such potential demand and leverage on its successful business model, the Group considers the acquisition as a strategic move which will provide huge opportunity to gain presence in the New York markets while gradually tapping the USA market.

Founded in 1989, TEI is one of the largest independent lifts and escalators companies in New York, principally engaged in the business of providing new construction, modernization, repair and maintenance services in the vertical transportation sector for both residential and commercial real estate customers. With its vision to leverage the leading position and reputation to win larger projects, targeting to increase its market share, the Group sees its market potential and expects great synergies can be generated among the two parties, which will lead to a win-win situation.

Financial Highlights of Transel Elevator & Electric Inc.

Year ended 31 December
(US$’million) 2019 2018 Changes
Revenue 118.7 95.1 24.8%
Profit before taxation 10.5 3.2 228.1

For the year ended 31 December 2019, TEI is in a sound financial performance with revenue increasing from US$95.1 million to US$118.7 million, marking a 24.8% growth, and the profit before taxation soared by 228.1% to US$10.5 million over the last fiscal year. Especially, the CAGR of revenue was recorded at 17% from 2014 to 2019, which shows an outstanding growth potential. Armed with this solid foundation, Anlev will leverage TEI’s extensive experience and market penetration in New York to further expand its brand reputation.

About Analogue Holdings Limited
Established in 1977 and headquartered in Hong Kong, the Group is a leading E&M engineering service provider in Hong Kong, 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, 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 Anlev lifts and escalators internationally. Nanjing Canatal Data Centre Environmental Tech Company Limited, an associate of the Group specialised in manufacturing of precision air conditioners, has been listed on the main board of the Shanghai Stock Exchange since November 2017.

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 and mainland China, today announced its first annual results (unaudited) for the year ended 31 December 2019 (“the Year”) since its listing on the Main Board of The Stock Exchange of Hong Kong Limited (“HKEX”) on 12 July 2019.

Highlights
– Total revenue and profit attributable to equity holders reach HK$4,481.9 million and HK$242.6 million respectively
– Satisfactory order intake in FY2019 valued at HK$6.5 billion, up 13.3% YOY
– A record high value of outstanding contracts in hand of approximately HK$9.4 billion

During the Year, the Group recorded total revenue of HK$4,481.9 million and a profit attributable to equity holders of HK$242.6 million. The Group’s gross profit in 2019 was HK$786.7 million, with gross profit margin increasing to 17.6% (FY2018: 14.9%), mainly attributable to the increased proportions of maintenance works and sales of goods awarded, which presented a higher gross profit margin than contracting works in the overall revenue stream. The high levels of tendering activities by the Group throughout 2019 paid off witha rewarding result after a year of record high business turnover in 2018. During the Year, a total of approximately 1,332 tenders or quotations each with an individual value of over HK$1 million had been submitted, of which approximately 316 were awarded witha value totalling approximately HK$5.5 billion. The Group has recorded a notably high value of outstanding contracts in hand of approximately HK$9.4 billion (including contracting work, maintenance work and sales of goods), approximately HK$2.0 billion more than last year. During the reporting year, the total value of tenders and quotations awarded increased by 13.3% to approximately HK$6.5 billion (FY2018:HK$ 5.7 billion).

The Board has proposed a second interim dividend of HK5.07 cents per Share. Together with the first interim dividend of HK3.85 cents per Share, the total dividend for the Year amounted to HK8.92 cents per Share, representing a dividend payout ratio of 51.5%.

Dr. Poon Lok To Otto, Chairman of Analogue Holdings Limited, said, “The Group has reached a historic milestone this year with its shares successfully listed on the Main Board of the Stock Exchange in July, and the inclusion in the MSCI Hong Kong Micro Cap Index a few months later further represented recognition from the investment market. Our dedication to sustainable development was clearly reflected by the progress across all four business segments despite the worsening business environment in the second half year. Our innovative capability in generating various new applications of technologies not only gained us new orders, but also consolidated our leading position. As we forge ahead, we will continue to honour our guiding principles – We Commit, We Perform, We Deliver to provide professional, efficient and quality E&M engineering services, and will adhere to the New Technology, New Market and New Business Mode strategy. We are in good position to capture the rising opportunities in the Greater Bay Area and One Belt One Road countries to fuel our growth ahead.”

Building Services
The building services segment continued to be the key revenue driver of the Group, contributing HK$2,676.3 million to revenue for the Year, with its capability encompassing the design, installation, testing and commissioning and maintenance services for customers from Hong Kong, Macau and mainland China for a wide range of buildings and premises.

During the Year, the Group managed to enlist some major new customers while maintaining an existing strong client base. It has stepped up the impetus in investing in, developing and implementing innovative construction technologies. For the Science Park InnoCell residential project in Pak Shek Kok, one of the first construction projects of its kind in Hong Kong, the Group has resolved a series of technical, logistical and cross-border administration and statutory approval issues related to the adoption of the latest construction technology of Modular Integrated Construction (MiC). The project was making good progress with completion expected in 2020. The Group was also developing the ATAL Building Services Prefabrication & Modularisation Construction Technology (ABSPM) for adoption of off-site prefabrication and modularisation in a systematic approach and on a wider scale, in order to enhance quality, safety and productivity, and to mitigate the acute problems of aging and shortage of site workers.

Environmental Engineering
The environmental engineering segment provides total solutions for environmental engineering systems for water, wastewater, sluge, solid waste and gas treatment plant projects, which contributed revenue of HK$1,086.9 million for the Year.The Group has developed and adopted several advanced technologies through its in-house research and develpment (“R&D”) team, giving it a competitive edge not only for bidding tenders in Hong Kong but also tapping the vast market of mainland China. Up to FY2019, the Group had project references in most of the 34 provinces level administrative regions in China. The Group also explored opportunities to provide environmental engineering service overseas, particularly to the relevant Belt and Road countries. During the Year, by working with a large China state-owned enterprise, the Group secured a contract for the supply of technologies and equipment (including 5-years operation), for a wastewater treatment plant project in Nepal.

Information, Communication and Building Technology (“ICBT”)
To ride the megatrend of the Smart City, the ICBT segment endeavours to offer solutions to help build green and intelligent buildings through integrating a wide range of information and communications technologies. During the Year, the ICBT segment recorded revenue amounting to HK$444.4 million.

In 2019, The Group’s award-winning Cloud-based Chiller Plant Energy Management Platform was commercialised and has attracted the interest of many reputable clients of commercial buildings. A number of orders has been received and more are under negotiation. A Fault Detection & Diagnostic (FDD) software and an Energy Management Visualization (EMV) software are also developed and ready for official launch in FY2020, which aim to help better monitoring the working conditions of building services equipment and building energy consumption patterns. A new stream of income this year came from equipping office, commercial and government buildings with the Internet-of-Things (“IoT”) infrastructure. For intelligent transport, the Group also secured an Automated Guided Vehicular (AGV) Parking System contract for the Hong Kong Science and Technology Park, which was the first commercialised smart parking system of its kind in Hong Kong, and is in the process of bidding for the second one.

Lifts & Escalators
The lifts & escalators segment encompasses the design, manufacturing (under the trade name of “Anlev”), sales, installation and maintenance of various lifts, escalators and moving walkways meeting different purposes and requirements. Capitalising on its outstanding performance ratings in safety and quality, the segment has realised steady growth, generating a revenue of HK$274.3 million.

During the Year, the Group received the first maintenance order of the Anlev Predictive Maintenance & Remote Monitoring System (APMRMS). On top of general new lift installation and maintenance projects, the increasing safety concern for lifts in society has led to many enquiries for modernisation of aged lifts. In FY2019, the Group secured contracts for modernisation of lifts of total value at HK$83.8 million and completed contracts of HK$44.5 million. Subsequent to Anlev’s admission to the Hong Kong Housing Authority (“HKHA”) approved contractor list for lift installations, the Group was awarded the first HKHA lift contract in the Year and is prepared to pursue more lift tenders from HKHA in the coming years. The Group was also awarded its first order in Mexico and Portugal respectively and signed new distributorship agreements in the Eurasian and Eastern Europe regions. The Group will put in extra effort to boost its business growth overseas, through targeting areas with a large market size and higher price level, while looking to engage incloser work relationships with its overseas partners.

Business Outlook
Despite the challenges in the global economy presented by the trade conflict between China and the United States of America as well as the coronavirus pandemic that started in January 2020, the Group still sees growth opportunities in its major markets, as driven by the favourable policies by the governments. Construction Industry Councilforecasted that the construction expenditure in Hong Kong is on a rising trend, from HK$245-$305 billion in FY2019-2020 to HK$275-$340 billion in FY2027-2028. The Group is forseeing a healthy pipeline of tenders and business opportunities to capture in 2020 and beyond, and is cautiously optimistic about the business outlook and further improvement in the upcoming years.

Going forward, the Group will stay alert and spare no effort to foster innovation and application of technologies, while continuously supporting the sustainable business strategy through seizing various growth opportunities for its four business segments. Meanwhile, the Group is actively pursuing merger and acquisition opportunities to facilitate its overall business growth. The Group has conducted preliminary enquiries with companies in South East Asia, North America and Europe in building services and lifts and escalators segments respectively. With a healthy liquidity position, the Group is in a favourable position and will continue to look for opportunities such as acquisition and formation of joint ventures to expand its various business segments in the future.

Dr. Otto Poon added, “With the Group’s strong commitment and continuous investment in innovation, technology, process improvement, professional development, and sustainable business growth, we are confident in harvesting material benefits of improved efficiency, productivity and competitiveness in our operations and opening up new business opportunities to continue strengthening the market leadership position and increasing shareholder value going forward.”

For further details of the 2019 annual results, please refer to the announcement that has been filed with The Stock Exchange of Hong Kong Limited.
https://doc.irasia.com/listco/hk/analogue/annual/2019/res.pdf

About Analogue Holdings Limited
Established in 1977 and headquartered in Hong Kong, the Group is a leading E&M engineering service provider in Hong Kong, 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, 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 specialised in manufacturing of precision air conditioners, has been listed on the main board of the Shanghai Stock Exchange since November 2017.