Man Yue Technology profit up 40.2% to HK$74mn

The company’s ESS unit eyed to take off and contribute revenue starting next year.

Man Yue Technology Holdings Limited (“Man Yue Technology”), one of the largest aluminium electrolytic capacitors (“E-Caps”) and conductive polymer aluminium solid capacitors (“Polymer Caps”) manufacturers in the world, on Tuesday announced its interim results for the six months ended 30 June 2011 (the “Current Period”).

The Group’s revenue increased by 20.6% to HK$763,733,000, was mainly due to rapid sales growth of its new products during the Current Period. Gross profit grew by 19.4% to HK$180,347,000, representing a gross margin of 23.6%. The Group’s EBITDA managed to rise by 21.7% to HK$135,504,000, representing an EBITDA margin of 17.7%. The rise took place despite the requirement to recognise a temporary loss arising from a change in fair value of certain 10-year term interest rate swaps contracts for hedging against its future interest rate exposure. The management believes that the drop in fair value does not affect the cash flow of the Group. Had this one-off item been excluded, EBITDA margin would have been 18.5%. Profit for the Current Period increased by 40.2% to HK$73,947,000. Basic earnings per share were HK15.48 cents (2010: HK11.07 cents). The Board has resolved to declare an interim dividend of HK3.0 cents per share (2010: HK1.0 cent per share), according to a Man Yue report.

Ms Kee Chor Lin, Chairman of Man Yue Technology, said, “The global economic recovery has been slow during the first half year, mainly due to the bearish American and European economies and overall weak consumption. Production disruptions for various materials and critical components used in technology brought about by the earthquake in Japan posed additional difficulties, particularly the electronics industry. As the Group is one of the top five global manufacturers of E-Caps, and is the largest aside from Japanese suppliers, we have been working diligently with existing and new customers to stabilise their supply, and as a result, increased our market share.”

The businesses of the three principal products of the Group, namely E-Caps, Polymer Caps and the ESS product family are all developing smoothly according to plans. E-Caps business has continued to grow at a double-digit rate even as market growth slowed during the Current Period, thus providing the Group with stable margins amidst challenging business conditions. The Group expects Polymer Caps to maintain growth momentum and help improve its overall margins.

The Spin-Off Project of this business, if it materialises, is expected to provide good returns for the Group and its shareholders. As the ESS family is currently under development, the Group will seek new customers involved in new energy applications. The management believes that the ESS arm will provide notable contributions to the Group starting from next year.

Ms Kee concluded, “We have successfully transformed the Group into a major global supplier of several critical electronic components. During the Current Period, our net margin has improved even in the face of various challenges. Though we are now confronted by rising material and product costs, we expect the Group’s performance to remain healthy, achieving growth while delivering better returns to our shareholders.”