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MANUFACTURING | Tony Chua, Hong Kong

Valuetronics profit down 1.9% to HK$60.4mn

Newly-commenced Licensing business increased its contribution to the Group’s revenue by 359.8% to HK$46.9 million for 1H FY2012.

Mainboard listed Valuetronics Holdings Limited (“Valuetronics”), a premier design, manufacturing partner for the world’s leading brands in the consumer, commercial and industrial electronics sectors and a licensee of a well-known brand for home comfort appliances, announced that its revenue increased 26.3% to HK$1,154.2 million and net profit decreased slightly by 1.9% to HK$60.4 million in its financial results for the 6 months ended 30 September 2011 (“1H FY2012”) compared to previous corresponding period (“1H FY2011”).

For the three months ended 30 September 2011 (“2Q FY2012”), revenue saw an increase of 20.8% to HK$627.1 million and net profit decreased by 12% from the previous corresponding quarter (“2Q FY2011”) to HK$28.8 million.

The Group’s total revenue of HK$1,154.2 million in 1H FY2012 saw increased contributions from the OEM, ODM and Licensing business segments, according to a Valuetronics report.

Commenting on the financial results, Mr Ricky Tse Chong Hing, Chairman and Managing Director said, “In 1H FY2012, we saw growth from all our business segments amidst the challenging business conditions. Moving forward, the weakening business climate will continue to be the major challenge in maintaining our momentum.”

The Group’s OEM segment contributed HK$498.5 million in revenue in 2Q FY2012 which was a 16.6% increase from HK$427.6 million in 2Q FY2011, mainly due to a significant increase in demand from one of the Group’s major OEM customers. For 1H FY2012, the OEM segment contributed HK$943.0 million, which was a 25.0% increase from HK$754.2 million in 1H FY2011.

On the ODM front, revenue increased by 12.6% to HK$95.8 million from HK$85.1 million in 2Q FY2011 mainly due to the steady growth from one of the Group’s major ODM customers. 1H FY2012, the ODM segment contributed HK$164.3 million in revenue compared to HK$149.6 million recorded in 1H FY2011.

Valuetronics’ Licensing business which commenced in first quarter of FY2011, picked up its growth momentum and contributed HK$32.8 million in 2Q FY2012, which was an 429.0% increase from HK$6.2 million in 2Q FY2011. On a half-year basis, revenue contribution from the Licensing business increased by 359.8% to HK$46.9 million in 1H FY2012 from HK$10.2 million in 1H FY2011.

Commenting on the Licensing business, Mr Tse said, “I am pleased that the Licensing business is steadily gaining traction with US retailers. We will push for greater penetration of major retailers and growth in the Licensing business with the expanded product mix of our product portfolio including air purifiers, fans and heaters.”

2Q FY2012 gross profit grew 14.8% to HK$87.5 million from HK$76.2 million in 2Q FY2011 with the gross profit margin declining slightly to 14.0% from 14.7%. The change in gross profit was mainly due to the change in product sales mix during the period. On a half-year basis, gross profit increased by 20.7% to HK$171.7 million in 1H FY2012 from HK$142.2 million in 1H FY2011 .

Selling and distribution costs increased by 51.2% to HK$ 25.7 million in 2Q FY2012 from HK$17.0 million in 2Q FY2011 mainly attributable by the full quarter effect of the Licensing business’ operations and administrative expenses also went up by 38.7% to HK$34.6 million from HK$24.9 million, largely due to the increases in salaries and bonuses for administrative and corporate employees as well as the full quarter effect of the staff costs and higher headcount incurred for the Licensing business. For 1H FY2012, selling and distribution costs was HK$44.4 million (1H FY2011: HK$31.9 million) and administrative expenses was HK$64.7 million (1H FY2011: HK$45.4 million).

For 2Q FY2012, profit before tax decreased 7.6% to HK$34.3 million compared to HK$37.1 million in 2Q FY2011, and net profit was recorded at HK$28.8 million, a decrease of 12.0% compared to HK$32.7 million in the previous corresponding quarter. On a whole, profit before tax for 1H FY2012 increased by 2.1% to HK$71.5 million from HK$70.0 million in 1H FY2011, and net profit hit HK$60.4 million, representing a slight decrease of 1.9% from HK$61.6 million in the previous corresponding period.

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