SIM Technology Group Limited st Half Results Announcement. August 21, 2015

Transcription

1 SIM Technology Group Limited st Half Results Announcement August 21,

2 Disclaimers This presentation includes forward-looking statements. All statements, other than statements of historical facts, that address activities, events or developments that SIM Technology expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forwardlooking statements. SIM Technology s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, market share, competition, environmental risks, changes in legal, financial and regulatory frameworks, government policies, international economic and financial market conditions, political risks, cost estimates and other risks and factors beyond our control. In addition, SIM Technology makes these forward-looking statements as of today and undertakes no obligation to update these statements. 2

3 Presentation Contents 1H-2015 Financial Highlights Richard Chan 1H-2015 Business Highlights Richard Chan 3

4 1H-2015 Financial Highlights 4

5 1H-2015 Financial Highlights (HK$M) 1H H-2014 % YoY Change Revenue 1, % Gross Profit % Gross profit as % of Revenue 15.8% 13.8% Profit for the period % Profit as % of Revenue 0.7% 0.5% Basic Profit per share (HK cents) 0.6 cents 0.2 cents +200% Interim Dividend (HK cents) Nil Nil 5

6 Revenue by Business Segment 1H H-2014 Revenue (HK$M) % of core business revenue Revenue (HK$M) % of core business revenue % YoY Change Handsets & Solutions % % +1.0% Full handsets (ODM) % % +4.2% Handset solutions and royalties % % -11.8% Wireless Communication Modules % % +25.5% Internet of Things Business % % +1642% Intelligent Manufacturing Business % - - NA Display Modules % NA Revenue of Core Business 1, % % +21.9% Properties Development % Total Revenue 1, % 6

7 Gross Profit by Business Segment 1H H-2014 (HK$M) Gross Profit % of respective revenue Gross Profit (Loss) % of respective revenue Handsets & Solutions % % Wireless Communication Modules % % Internet of Things Business % 1 4.2% Intelligent Manufacturing Business % - - Display Modules - - (5) (33.6%) Core Business GP % % Residential Properties % % Total GP % % 7

8 1H H-2014 Operating Expenses HK$M % of revenue HK$M % of revenue % YoY Change Research & development % % -0.9% Selling & distribution % % +42.4% Administrative % % +42.3% Total operating expenses % % +21.9% 8

9 Cash Flow Statement Highlights 1H-2015 Net Cash from operating activities 32 Capital expenditure (7) Proceeds on disposal of equipment 14 Development costs (80) Net increase in bank borrowings 2 Advance from a director 55 Others 2 Net cash inflow 18 Cash balances at beginning period 374 Cash / Bank balances at 30 June 2015 (including pledged bank deposits and structured deposit) Gearing ratio (bank borrowings / total assets) 10.0% 9

10 Financial Ratio 1H-2015 Yr-2014 % Change Current ratio (times) % Inventory turnover ratio # (days) % Trade and notes turnover ratio # (days) % Trade and notes payables turnover ratio # (days) % # for the core business 10

11 1H-2015 Business Highlights * Handsets and Solutions Business and Prospects * Wireless Communication Modules Business and Prospects * IOT Business and Prospects * Intelligent Manufacturing Business and Prospects * Property Development Business 11

12 1H-2015 Handsets and Solutions Business Performance Handsets & Solutions Sales H H-2014 Handsets & Solutions Gross Profits H H-2014 Sales & GP: HK$ Billion 1H-2015 : GP% 14.8% 1H-2014 : GP% 13.3% Handsets and Solutions Sales Volume, Gross Profits & GP % Sales Volume: Revenue : Gross Profits GP% recorded greater growth in overall delivery volume of handset terminals 1% growth slightly over 1H-2014 due to price competition of 4G consumer handsets 13% growth over 1H-2014 due to the increase of the shipment of industrial application terminals, driving the increase of the gross profits and GP% 14.8% vs 13.3% (1H-2014) Overall Business Strategy and Performance Benefitting from the Group s expansion in the differentiated consumer handset and industrial application terminal market in the past two years, shipment volume of its handset terminals has recorded greater growth. For the consumer product lines, the Group has collaborated with a domestic electronic product brand to develop a product which is scheduled to commence mass production and shipment. Meanwhile, the Group is negotiating with other major brands for partnership opportunities. For the industrial application terminals, the Group has continued to develop new products and new markets in the logistics, scanning, payment, police operation, and other specific areas as well as terminals with waterproof, dustproof and shock-resistant functions. 12

13 Future Prospects - Handsets & Solutions Business Benefitting from the Group s expansion in the differentiated consumer handset and industrial application terminal market in the past two years, shipment volume of its handset terminals has recorded greater growth. The Group will continue to implement its ongoing strategies, i.e., establishing a presence in the ODM consumer handset business and developing industrial application terminals business which are in line with the Internet Plus strategic directive of the government. In view of the continuous global uptake of 4G applications, the Group will adhere to its customized differentiated approach. Business from new high-end customers is expected to generate stable revenue growth. Industrial application terminals in line with the Internet Plus strategic directive are to be delivered gradually, which should generate reasonable gross profit for the Group as well. For the industrial application terminals, the Group has continued to develop new products and new markets in the logistics, scanning, payment, police operation, and other specific areas as well as terminals with waterproof, dust-proof and shock-resistant functions. As the products developed in 1H-2015 have commenced mass production, the Group expects its industrial application terminal business to grow steadily in the second half of the year. At the same time, the Group is actively exploring overseas markets such as Japan, Europe and the US so as to lay a solid foundation for business growth in the next year. Therefore, the management believes that the consumer handset and industrial application ODM businesses will remain as the major profit drivers for the Group during the next two years. 13

14 1H-2015 Wireless Modules Business Performance Wireless Modules Sales H H-2014 Wireless Modules Gross Profits H H-2014 Sales & GP: HK$ Billion 1H-2015 : GP% 15.3% 1H-2014 : GP% 15.0% Wireless Modules Sales Volume, Revenue, Gross Profits & GP % Sales Volume: Revenue : Gross Profits: GP%: Overall Business Performance recorded more than 25% growth in overall shipment volume recorded more than 25% growth in overall revenue, attributable to the yoy surge of 120% in the shipment of the 3G/4G products over 28% growth over 1H-2014 due to the increase in the shipment of 3G/4G products with high GP% and higher unit prices 15.3% vs 15.0% (1H-2014) Overall the IOT market in the PRC is at a stage of expanding demand, mainly applied in areas of: Electricity - the Group has won more than 80% of the bids it has submitted in the market in relation to module projects Mobile payment - the Group has forged strategic alliances with several major customers in the POS industry, thereby generating a handsome volume of businesses Internet of vehicles The Group maintained more than 50% of market share The Group s high-price performance product line has pushed it ahead of its European and US competitors, and has satisfied the increasing demand of the overseas 3G/4G LTE module. Consequently, the Group has recorded a growth of 30% in sales in Europe and the U.S. The Group s 4G product has been certified by the U.S. (AT&T) and the Japan operators (SOFTBANK) 14

15 Future Prospects - Wireless Modules Business The Group will continue to develop local and overseas markets and further enlarge its market share. China Market: Continue to increase resources to capture the businesses of the electric market, mobile payment POS industry and internet of vehicles market. In addition, the Group has stepped up efforts in the development of new products China-made GPS modules commencing mass production in order to meet the tender requirements set by the Ministry of Transport of the PRC. Oversea Market: In the US and European wireless networks, shifting to 3G and 4G networks has become the dominant trend. In addition, our LTE module was certified by the US and the Japan operators which is expected to boost the shipment volume, sales and profit of our modules in these markets. In the Asian market, the Group will continue to leverage its leading position to enlarge its market shares in India, Japan and Korea. The Group will continue to develop local and overseas markets and further enlarge its market share. As 3G/4G LTE modules have obtained the certification in the US and Japan, the proportion of these products will increase considerably in the wireless communication business. With the 3G/4G selling price and GP% are much higher than 2G products, a significant increase in turnover and margin is set to occur, the Group has confidence it can maintain the role as a major global supplier of wireless communication modules. 15

16 2015-1H IOT Businesses and Prospects Cloud Computing and Big Data Service Platform Businesses In the past few years, the Group has leveraged its advantages in IT and has built a cloud computing and big data service platform to address the needs of various industry sectors. A series of IOT application integrated solutions has been developed, including smart home elderly service systems, health monitoring systems, vehicle anti-theft management systems, management systems for property security and maintenance staff, management systems for student safety and an automatic vending machine online-to-offline (O2O) service platform. Revamping Traditional Vending Machine Business To formulate a typical Internet Plus business model,the Group has developed a digital and online operating platform for vending machines. Firstly, all vending machines with Internet connections transfer the status and transaction information of the vending machine in realtime to the cloud platform. Secondly, the vending machine has consolidated different online payment functions such as QuickPass, Alipay and WeChat; besides, key controller, large display screen, and free WIFI hot spots have been installed on the vending machines to access the Internet. With such a comprehensive O2O platform, this business poses huge development potential. After development for more than one year, most of the Group s vending machines are located in economically prosperous regions such as the Yangtze River Delta and Pearl River Delta regions. During the period under review, owing to rapid business growth of Shanghai Yunhao and the increase in franchisees, the number of automatic vending machines has risen substantially. In spite of keen competition in the automatic vending machine industry, the per capita vending machine rate in the PRC is still very low. With the higher labour cost and the development of the fast moving consumer goods industry, our vending machine business is expected to maintain sustainable growth. 16

17 1H-2015 Intelligent Manufacturing Business and Prospects Intelligent Manufacturing Business The Group has been developing integration technology for robotic applications for nearly three years and has successfully replaced a large number of labour on the production line. Currently, several major handset processing factories have ordered this equipment, making the Group a handset manufacturing equipment vendor. As such, the Group has set up a robotic intelligent manufacturing association, which aims to replace labour with robots in the labour intensive manufacturing industries in China. The Group has also acquired and merged with seven small companies with expertise in robot integration technologies. In line with the requirements of Industry 4.0 of the German government and Made in China 2025, the Group is conducting a fundamental restructuring and optimization of the production and management models of its factories. The Qingpu factory of the Group has been designated as a demonstration model for Made in China 2025 by the Shanghai Economic and Information Technology Commission. Intelligent robotic manufacturing is a new business for the Group, and it also presents the strongest potential for development. After three years of efforts, the Group has assumed the leading place in this segment. As the development of intelligence in robots has escalated in the local manufacturing industry, In the next few years, the Group s intelligent manufacturing business is likely to grow several times as it becomes the major provider of intelligent manufacturing equipment made in China. 17

18 1H-2015 Property businesses performance Property Business (Shenyang( 瀋陽 ) & Taizhou( 泰州 )) Shenyang City As at 30 June 2015, Phase I of The Riverside Country ( 晨興 翰林水郡 ), which is located in Shenyang City, the PRC, has a total of 404 residential units, of which 389 units had been sold. Phase II has a total of 756 residential units, of which 612 units had been sold while in the completed section of Phase III, 45 units had been sold. Taizhou City As at 30 June 2015, Phase I of Seven River in Sweet ( 七里香溪 ), which is located in Taizhou City, the PRC, a total of 135 residential units had been sold and is expected to be delivered in the fourth quarter of The sales recognised for the 1H-2015 was amounted to HK$66.4 million (2014: HK$57.5 million) with gross profit margin of 18.5% (2014: 27.4%). 18

19 The management has confidence that its high-end consumer handset, industrial application terminal ODM and wireless module businesses will deliver strong growth momentum. As it expands its scope of business, this momentum together with the growth driver created by the new businesses (IOT business and intelligent manufacturing business) positions the Group to continuously and steadily grow in the coming years - Thank You - 19