Tuesday, April 13, 2021
 
Columnist
Martin Hennecke
 
KINGWELL GROUP
HKEx Stock Code : 01195 
 
Corporate Profile
Principally egaged in the manufacture and sale of printed circuit boards and printed circuit boards assembling products; and provision for service mount technology processing service, and property development.

Business Review - For the year ended June 30, 2012

Electronic Business

The Group is principally engaged in the electronic business. Its products have a broad range of applications in items such as mobile communication devices, consumer digital devices, automotive and medical devices.

During the Year, unfavourable market condition in the global economy continued to pose various challenges to the electronics industry. Both the Group's orders and average selling prices were under pressure amid intense market competition.

Rigid printed circuit boards (..RPCBs'') continued to remain as the Group's core business. Being one of the largest producers in Fujian and leveraging on its strong client base, the Group continued to receive stable orders from existing clients and maintained its market share in the region. However, owing to the uncertain market conditions, average selling prices have not yet rebounded to previous levels.

During the Year, revenue attributable from electronic business was RMB181,152,000 (2011: RMB250,134,000) representing 64.7% of the Group's total revenue. The electronic business recorded a loss of RMB150,731,000, as compared to a loss of RMB108,685,000 in last year.

Property Development Business

The residential development project ..Anlu Taihe Paradise'' at Liang Ji Bei Road, Anlu Economic Development District in Anlu city, Hubei province in the People's Republic of China (the ..PRC'') is wholly owned by the Group and is having positive contribution to the Group. The project comprises three phases, with a total gross floor area of approximately 272,568 square meters. The project marked the successful entry by the Group into the property development business and provided strong support in achieving the strategy of business diversification and generated new sources of income in order to improve the Group results during the Year.

During the Year, revenue attributable from property development business was approximately RMB98,835,000 (2011: RMB104,443,000), representing 35.3% of the Group's total revenue. The property development business recorded a profit of RMB22,506,000, as compared to a profit of RMB15,581,000 in last year.

Geographic Information

Geographically, sales within the PRC (excluding Hong Kong and Taiwan) remained the largest segment, generating 88.2% (2011: 83.1%) of the Group's revenue. The balance of approximately 11.8% of the Group's revenue (2011: 16.9%) was taken up by the overseas customers.

Business Outlook - For the year ended June 30, 2012

Looking forward, the intense competition in the electronics industry and unfavourable operating environment will continue to pose challenges to the electronics industry as well as the Group. The demand for electronic products recovered at a slow pace. Customers were still cautious in placing orders which added to the downward pressure of average selling prices. Furthermore, the growing inflation in China led to rising raw material and labour costs, which increased production costs and undermined the profitability of the Group.

In order to sustain the continuous growth of the Group and meet the coming challenges, the Group had successfully entered into the property development business through its property development project in Anlu City, Hubei province in the PRC. The real estate project, comprising various types of properties including villas, houses, apartments, residential buildings and commercial buildings, had made significant contribution to the Group during the Year.

Looking ahead, the Group will continue to implement its diversified development strategy and proactively search for potential investment opportunities, particularly in the gold mining projects, as reference to the Company's announcements made on 22 May 2012, 4 July 2012, 5 July 2012 and 15 August 2012, the Group had completed the acquisition of 51% equity interest in a gold mining company in the Russian Federation. The acquisition provided the Group with a unique opportunity to purchase the gold mine and enabled the Group to enter into the gold mining industry. Also, the Group will continue to explore gold mining business for its long-term development.

Source: Kingwell Group (01195) Annual Results Announcement
Chairman Hui Lung Hing Issued Capital (shares) 1,788M
Par Value HKD 0.1 Market Capitalisation (HKD) 1,323M
 
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