Monday, November 30, 2020
 
Columnist
Martin Hennecke
 
KFM KINGDOM
HKEx Stock Code : 03816 
 
Corporate Profile
The Group's business model principally involves the provision of innovative design engineering solutions and manufacturing services in relation to precision metal stamping tools and metal parts and components to its customers in the five major industry sectors, namely medical and test equipment industry, finance equipment industry, consumer electronics industry, network/data storage industry and the office automation industry.

Business Review - For the year ended March 31, 2013

The global economy has experienced continuous uncertainties and downside risks emanating from the unresolved sovereign debt crisis in Europe, the faltering economic growth in the US and China's economic slowdown. For the year ended 31 March 2013, revenue of our Group decreased by 11.0% from approximately HK$951.4 million for the year ended 31 March 2012 to HK$846.5 million.

The decline in revenue is mainly due to decrease in revenue of consumer electronics segment by 28.6% for the year ended 31 March 2013 as compared with that of 2012 since our Ultimate Customer had gradually ceased to engage one of our major customers for sourcing and procurement of the relevant metal parts at the beginning of 2012. Such decreasing trend continued and we have not received any purchase orders from that major customer for the relevant metal parts since the end of June 2012. Although from June 2012, we started to serve two other sub-contracting manufacturers of the Ultimate Customer for the manufacturing of similar type of the mental parts that we previously produced for the said major customer, our Group already suffered significant drop in revenue and net profit for the year ended 31 March 2013 as compared to that of last year.

Although under such circumstances, the Group has continued to mitigate its risks by focusing on business fundamentals. With respect to our diversified portfolio in the five business segments that we principally engage in, and our solid long term relationship with our major customers, we have managed the prevailing unfavourable macroeconomic uncertainties within particular business segment.

Business Outlook - For the year ended March 31, 2013

In the middle of the unresolved sovereign debt crisis in Europe, hindering economic growth in Europe, US and China's slowing economy, our clients are expected to be more cautious in order placement. However, our Group is cautiously optimistic about the business opportunities in the coming financial year.

In the near term, our Group will increase the use of robotic arms and adopt other automatic features in our equipment for feeding works and therefore reduce reliance on our workers. We believe the optimisation of our overall production process would further increase our capabilities to produce high quality products and reduce our labour cost, thereby enhancing our profit margins.

In the long run, our Group believes that our business strategies include the following: (a) we intend to further expand our sales effort to growing business segments for precision engineered metal parts; (b) we plan to develop a new production base in Suzhou, which among other purposes, can minimise the impact of rental increase in the long run on our current production base in Suzhou which is located on several leased factory premises; (c) we will continue to optimise our production process by utilising our engineering skills, strengthen our research and development capabilities and increase our production automation; and (d) we intend to seek opportunities for acquisitions of production facilities or further strengthen our relationship with our customers by strategic cooperation, which will better prepare our Group to materialise the future business opportunities in the long run.

With our professional management expertise, an insightful business strategy, careful execution, compelling products quality and our stable and conservative financial position, our Group is well-positioned for sustainable and healthy growth in the chosen market segments in which we operate and strive to reward our shareholders with fruitful returns.

Source: KFM Kingdom Hldgs (03816) Annual Results Announcement
Chairman Peter Sun Issued Capital (shares) 600M
Par Value HKD 0.1 Market Capitalisation (HKD) 696M
 
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