During the review year, the operating environment has remained challenging due to the ongoing global trade disputes and fluctuation in exchange rate. Nevertheless, the Group managed to achieve a stable revenue at HK$1,260.8 million (2018: HK$1,284.8 million). Gross profit margin slightly increased to 14.6% for the year 2019 from 14.5% for the year 2018, mainly due to improvement in production efficiency of the Group's Yichun factory after about one year of operation. The Group has also shifted production of some of its electronics products that were subject to additional tariffs imposed by the US to subcontractors in Malaysia and the Philippines, in order to reduce the impact from the Sino-US trade dispute on the Group's business. The adjusted profit from continuing operations attributable to owners of the parent (excluding the impairment losses on the overdue consideration for the disposal of the discontinued operation and the debt due from the disposed subsidiary of the discontinued operation) was HK$33.6 million (2018: HK$75.4 million).
Business Review and Prospects
For the electronic products segment, total sales revenue comprises sales of finished electronic products, plastic moulds and components and other components for electronic products. During the review year, sales of irrigation controller products and sales of walkie-talkies increased by HK$24.1 million and HK$31.3 million respectively, despite the drop of sales from components for electronic products, segmental revenue thus remained stable at HK$1,255.8 million.
The demand for irrigation controller products and other major electronic products is expected to remain stable in the year 2020. In addition, new products for new customers in the PRC and in Europe are expected to be launched in 2020 to provide momentum for the continuing growth in revenue. The Group has confidence that the overall performance of the electronic products segment will remain stable in the near future.
During the year, Yichun Yilian Print Tech. Co., Ltd., an associate of the Group which is established in the PRC and principally engaged in the manufacturing and sale of printers and other accessory products, and the provision of on-line printing services, has been approved as a qualified supplier of printers to governmental organisations in the PRC, which is expected to contribute continuing growth momentum to Yichun Yilian's business in the near future.
Operations of the biodiesel products and energy efficient gas stoves segment continued to remain stable during the review year with total sales revenue of approximately HK$3.4 million (2018: HK$4.2 million). The Group expects that the business of biodiesel products and energy-efficient gas stoves segment will remain stable in the year 2020.
The Group's energy-saving business segment consists of revenue generated from over 650 retail stores of Suning.com Co., Ltd. and two hotels operated by the HNA Group Co., Ltd. with LED lighting equipment installed. As the energy management contract with one of the hotels has expired during the review year, segmental revenue dropped to HK$1.6 million (2018: HK$3.5 million). The Group expects that the energy-saving business will remain stable in the near future
Looking ahead, in view of the uncertainty of the global economic environment and escalating geopolitical tensions from the ongoing trade dispute between the US and the PRC, the Group will continue to devote efforts to exploring new markets and new customers in order to broaden its customer base. The Group will also continue its effort to tighten the controls over production costs and overhead, and to improve production efficiency so as to maximise profitability.
Mr. Lam Yin Kee, Chairman of Alltronics concluded, "Although the recent outbreak of the coronavirus disease has had an adverse impact on the business operation and overall economy worldwide, the Group has implemented various cost-cutting measures to minimise the adverse effects. We will continuously monitor the situation, assess and actively react to its impact, in order to meet customers' needs. In the coming year, we will continue to look for investment opportunities to diversify its business so as to maintain its growth momentum towards the end of providing better returns to shareholders."
About Alltronics Holdings Limited (Stock code: 833)
Alltronics Holdings Limited is mainly engaged in the design and manufacture of a wide range of electronics products with quality and style, supplying biodiesel products and energy efficient gas stoves, as well as the provision of energy-saving business solutions. Besides, the Group is in the process of diversifying its business into manufacturing patented Wi-Fi Products and printers. The Company is a constituent stock of the Morgan Stanley Capital International ("MSCI") Hong Kong Micro Cap Index. For more information, please visit the company website http://www.alltronics.com.hk/.
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