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2018 Annual Performance News Conference

Net profit HKD 350.2 million, annual growth 16.0%, closing dividend 14.0HK cent, and annual dividend payout ratio 47.6%

Mobile phone and wearable device, commercialcommunication device and smart home are recorded as strong growth 

Plant workshop expansion and upgradingare completed, and intelligent manufacturing is continuously deepened



[Mar. 12, 2019-HongKong] TK Group (Holdings) Limited (hereinafter referred to as “TK Group”or “the Group”, stock code: 2283), one of the global leading one-stop plasticssolution providers, releases the annual performance up to Dec. 31, 2018 (in theyear) at investor news conference today, which attracts a number of fundmanagers and analysts. The atmosphere is warm on the site.




The executives answerquestions of investors at the news conference.

The global trade warkeeps overheating in 2018, and operation environment is challenged. However,the performance of the Group realizes stable growth. Mobile phone and wearabledevices, commercial communication device and smart home in downstream industrykeep growing. The annual revenue of the Group in 2018 is HKD2,298.6 million(annual revenue in 2017: HKD1,860.9 million), with the year-on-year growth of23.5%. Gross margin is increased to HKD 724.4 million (gross margin in 2017:HKD 627.0 million), with the year-on-year growth of 15.5%. Profit attributableto owner of the Company in the year recorded in 2018 creates new high, reachingHKD 350.2 million (in 2017: HKD 301.8 million), with the year-on-year growth of16.0%. Net profit ratio is 15.2% (in 2017: 16.2%), with year-on-year decreaseof 1.0 percent point. The basic earnings share is 42.0 HK cent (in 2017: 36.0HK cent), with year-on-year growth of 16.7%.


The Board has decidedto pay annual closing dividend 14.0 HK cent per share up to Dec. 31, 2018. Togetherwith the distributed mid-term dividend 6.0 HK cent per share, the payout ratiois 47.6%.

Prospect

In 2019, the volatilityof global politics and economy still exists, and the Group believes that thetest will be severe. The Group will insist on the mission of satisfyingcustomer, constantly input intelligent automation and optimize productivity,and the Group has the confidence to become the strong backup force of customerin the severe operation environment and come out top among the peers 


Mr. Alan P.L. Li, Chairmanof TK Group, expresses that: [It isthe 35th anniversary of TK Group in 2018, and also the 5th anniversary of being listed. For thirty five years, TK Group has beenspecialized in high precision injection mold, improved technology and moldprecision, and created professional mold brand. Today, the mold precision of TKGroup has reached international level and met the requirement of MT1 in China.The Group never changes original intention, constantly deepens intelligentmanufacturing, and inputs a lot of resources in intellectualization andautomation. The Group has invested HKD 50 million in 3 intelligent flexibleproduction lines in the year, and continues to deepen overall intelligentoperation process. The Group will aim at being professional, precise, stable,strong and greater, despite of the variable global situation, TK Group hasprepared for future challenges.]


Mr. Weng Jianxiang, CEOof TK Group, adds: [Up to Dec. 31, 2018, the orders inhand of TK Group have reached HKD 788.0 million. To satisfy the saturatedorders in hand and new customer and new project in negotiation, the Groupimplements a number of plant workshop expansion and upgrading projects in 2018,the newly leased plant in Huizhou (the land area is about 15000m2)will be put into use in Q1 of 2019, and the Group will continue to look forproper land nearby to further expand the capacity of injection mold. Inaddition, to reduce the risk of geopolitics and policy, the Group is activelysearching proper plant resources in Southeast Asia. Besides own plants, theGroup considers purchasing enterprise that has similar corporate culture withthe Group and enterprise specialized in process technology and management, soas to accelerate business expansion and disperse the possible impact caused bythe continuous trade dispute.]


Business review in 2018

As the global leadingone-stop comprehensive plastics solution provider, TK Group provides customizedhigh precision injection mold product and service with cost benefit tointernational famous enterprises. In the year, mobile phone and wearabledevices, commercial communication device and smart home in downstream industrykeep growing.

Mold making business

The Group ownsultra-large standard mold production line and precision mold production line.The ultra-large standard mold product is mainly auto part, and the maincustomers are primary part suppliers of European auto brands such as Benz, BMW,VW. Covering high-end electronic product as commercial communication device,mobile phone and wearable devices, medical and personal care, and coupled withdownstream injection mold component manufacturing business, the precision moldproduction line brings more conveniences and economic benefits for one-stopcustomer service. In the year, the revenue of mold manufacturing businessdepartment rises stably by 6.6% to about HKD 692.4 million(2017: HKD 649.8million) and the gross profit ratio is 37.4%. The Group has upgraded moldworkshop in the year, and 3 new intelligent flexible production lines are builtin 2018 (now there are 4 intelligent flexible production lines).In virtue ofconstant input in intelligent automation to improve capacity and productivity,the Group is committed to providing high-quality mold and design solution, andkeeps absolute advantage in injection mold making technology.


Injection mold component manufacturingbusiness

The revenue ofinjection mold component manufacturing business department is about HKD 1,606.2million (in 2017: HKD 1,211.1 million), with the year-on-year growth of 32.6%,and gross profit ratio is 29.0%. In which, mobile phone and wearable deviceskeep growing, with year-on-year growth of 52.2%, due to strong growth of ordersfrom brand customers that provide protective shell of smartphone; commercialcommunication device realizes year-on-year growth of 38.3%, due to continuousgrowth of commercial and communication equipment international brand customerbusiness of the Group; smart home shows continuous market demand growth, withthe year-on-year growth of 21.9%. The Group is the core supplier of severalproducts of two leading smart home brands in North America, maintains goodcooperation with brand customer, obtains orders of several new productcomponents in succession in the year, and continuously develops smart homemarket. In the year, the Group expands 30% capacity and it is believed that thebenefit will be fully released to increase gross profit ratio after new productis put on track in succession. In 2018, the Group establishes technical servicecenter in Silicon Valley to provide real-time technical service to localcustomer, and receives positive comments, one smart home leading brand startsbusiness with the Group in the year.