Press Release
Financial Services Business Expands Property Investment Segment Drives 147% Growth in Profit
(March 31, 2017 - Hong Kong) Realord Group Holdings Limited (“Realord” or the “Company”, together with its subsidiaries collectively known as the “Group”, stock code: 1196.HK) is pleased to announce its audited annual results for the year ended 31 December 2016 (the “Year”).
2016 Annual Results
FY2016
(HK$’000)
FY2015
(HK$’000)
(Restated)
Changes (%)
Revenue
209,784
207,732
+0.99%
Gross Profit
90,999
71,121
+27.95%
Gross profit margin
43.4%
34.2%
+9.2pp
Profit before tax
208,175
48,346
+330.60%
Profit attributable to the equity holders
80,097
32,427
+147.01%
Earnings Per Share (HK cents)
6.95
3.04
+128.62%
During the Year under review, the Group recorded total revenue of approximately HK$209.8 million, representing an increase of approximately 1.0% as compared with last year (2015: HK$207.7 million (restated)). The Group recorded a profit of approximately HK$80.1 million for the Year, increased by 145.4% as compared to HK$32.6 million in 2015. The gross profit margin increased to 43.4% (2015: 34.2%) due to the remarkable increase of the revenue contributed by the Financial Services Segment and Property Investment segment. The earnings per share was HK6.95 cents (2015: HK3.04 cents).
The increase in profit attributable to the equity holders was mainly due to the increase in revenue arising from the rental income in Property Investment Segment of approximately HK$11.3 million and the fair value gain on investment properties amounted to approximately HK$270.5 million (2015: HK$90.1 million), which was partly offset by the related deferred taxation of the fair value gain of approximately HK$125.6 million (2015: HK$14.5 million), the revaluation deficit on property, plant and equipment of approximately HK$17.3 million (2015: HK$2.1 million) as well as the increase in finance cost of approximately HK$ 18.2 million. The increase in finance cost was mainly due to the increase of interest-bearing borrowings during the Year.
Business review
The Motor Vehicle Parts Segment contributed revenue of approximately HK$100.6 million, representing an increase of 5.5% from HK$95.4 million year-over-year (“YoY”), which accounted for 48% of the Group’s total revenue during the Year. However, due to the increase in administrative expenses for expansion of the operation, the operating profit decreased to approximately HK$5.0 million.
The Commercial Printing Segment recorded a revenue of approximately HK$72.7 million, representing an increase of 6.6% from HK$68.2 million YoY, which accounted for 34.7% of the Group’s total revenue during the year. However, due to the increase in the operation cost, the operating profit decreased to approximately HK$0.9 million.
The Property Investment Segment recorded a revenue of approximately HK$17.0 million during the year under review, representing 8.1% of the total revenue of the Group. The revenue from this business segment increased by 198.2% as compared to approximately HK$5.7 million (restated) in 2015. The increase was resulted from the acquisition of the properties located at Qiankeng Industrial Zone, which contributed additional revenue to the business during the year. Due to the fair value gain on investment properties recorded during the Year amounted to approximately HK$270.5 million (2015: HK90.1 million), the profit from this business increased to approximately HK$282.4 million (2015: HK$90.6 million (restated)).
The Financial Services Segment generated revenue of approximately HK$10.9 million, representing an increase of 119.0% from HK$5.0 million YoY, contributing 5.2% of the Group’s total revenue during the Year. Due to the increase in the revenue, the segment recorded an operating profit of HK$2.4 million for the Year as compared to operating loss of approximately HK$1.2 million in 2015.
The Hangtag Segment contributed revenue of approximately HK$8.5 million, as compared to HK$11.5 million in 2015, representing 4.0% of the Group’s total revenue during the Year. The decrease was mainly resulted from the decrease in orders from customers, which were mainly from the garment industry. Through implementation of cost control measures, included outsourcing part of the manufacturing process, the operating loss decreased to HK$0.4 million as compared to operating loss of approximately HK$2.3 million in 2015.
Outlook
For the coming years, the Group would extend the Motor Vehicle Parts Segment to the retails operation. The Group is in the process to set up retail shops in Hong Kong and the PRC in order to gain direct access to the customer market. The Group expects that the PRC operations will effectively contribute the expansion of this business segment. Besides, the Group is sourcing different brands of motor vehicle parts suppliers in order to broaden the variety of products offered to our customers.
The operating environment of the commercial printing and hangtag businesses will continue to be competitive. The Group shall strengthen its business development team to achieve sales growth and increase market share. Meanwhile, the Group shall adopt a more conservative strategy by simplifying the operation process and reducing the operation scale.
Financial Services Segment and Property Investment Segment will become the growth driver for the Group in the future. The Group had entered into an agreement with 5 other independent third parties to set up a securities company (namely “Yuegang Securities Company Ltd”) in Guangzhou Pilot Free Trade Zone, Nanshan area to carry out full license securities businesses in the PRC. The Group believes that the set-up of the securities company, when materialized, will be beneficial to acquire valuable investment opportunities by gaining a foothold in the strictly regulated securities market in the PRC. It can also promote the expansion of Financial Services Segment for the Group. With the launch of the Shenzhen-Hong Kong Stock Connect Scheme, the preferential government policies and the establishment of the joint venture, the Group would sustain a long term growth in the Financial Services business.
In 2016, The Group completed the acquisition of “Qiankeng Industrial Land” (land and properties located at Qiankeng Industrial Zone, Fumin Community, Guanlan Town, Baoan District, Shenzhen, the PRC). The properties together with “Zhangkenjing Land” (land and properties located at the Industrial Zone in Zhangkengjing Community, Guanlan, Longhua district, Shenzhen, the PRC) acquired in 2015, are considered as the paramount assets of the Group to evolve the real estate development business. The Group is in the process to study on the possibilities to change the land use of the Zhangkenjing Land to the use as office buildings and associated apartment and facilities. Looking forward, the Group will keep track with the economic and urban renewal development in the PRC and will strive to explore for any potential real estate development or property investment opportunities.
The Group will diversify its business into scrap materials industry upon the acquisition of Top Eagle International Trading Limited. In view of the government’s plan to foster the development of the recycling industry, the Directors are optimistic about the prospects of the scrap materials industry and are of the view that it is an opportunity for the Group to further diversify the business scope of the Group.
In addition, the Group has become a constituent of Shenzhen-Hong Kong Stock Connect Scheme which reflects a high recognition of the Company’s good performance and industry position. Through the scheme, the Group expects to diversify its shareholder base and enhance liquidity. With the continuing development of businesses, the Group will strive for a better return to investors.
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Realord wins a “Choice of Property Development in Shenzhen” Award
(February 14, 2017 – Hong Kong) Realord Group Holdings Limited (“Realord” or the “Company,” together with its subsidiaries collectively known as the “Group,” stock code: 1196.HK) is pleased to announce that the Company received a “Choice of Property Development in Shenzhen” Award granted by the judging panel of “Investors’ Power Picks 2017” which is formed by Metro Radio Finance (FM104) & Strategist.
Dr. Bryan Lin, Xiaohui, Chairman of Realord Group, said: "First of all, thank you for the judging panel giving us such an award, we are very honored and happy on it. Thank you for your attention and support! Property development is one of the most highly focused businesses to our Group. In recent years, we have put a lot efforts and resources in it. Currently, the Group has been launching two property development projects. One is a commercial and residential development located in Longhua District, while the other one is a premium office development situated in Guangming New District, Shenzhen. These two projects, being full of Realord staff’s efforts as the Group’s first debuts of property development in Shenzhen, would hopefully be put on the market within this year, as soon as possible. They are of great significance to the Group’s brand promotion in particular property development. We, the management, believe that the demand on real estate in Shenzhen will be increasing in the future, thus the group will accelerate the process of transforming its owned industrial properties into other buildings. We aim to develop them into high-end commercial apartments or boutique residential projects, meanwhile, the Group does not rule out the possibility for any acquisition of real estate projects in the primary market as the reserves in the future development. Realord Group’s steady development is inseparable from different parties’ great supports. Once again, I would like to say thank you for their concerns and supports. I wish you all the best in the year of Rooster. “
Dr. Bryan Lin, Realord Group Chairman (left) & Mr. Joe Lam
Dr. Bryan Lin, Chairman of Realord Group shared his feelings on the stage
The Award winners
Realord Group Chairman Dr. Bryan Lin (right) & CEO Madam Su Jiaohua
Realord Group Chairman Dr. Bryan Lin (left) & Strategist Chairman Mr. Chen Shing Lung (right)
“Choice of Property Development in Shenzhen” Award
“Investors’ Power Picks 2017” first jointly organized by "Investment headquarter 104" from Metro Radio Finance & Strategist took place at JW Marriott Hotel Hong Kong. It sets up a complete rating standards to measure the high potential and growth companies according to their stock price, performances, risk management, sustainable development and social responsibility. Totally thirteen companies won the awards in this event.
About Metro Radio Finance
Metro Finance, one of the three main channels of Metro Broadcast Corporation (Metro Finance, Metro Info, and Metro Plus), is the first 24-hour Cantonese finance radio channel in the world. Its goal is to provide the audience in Hong Kong and other parts of the world with accurate, real-time and market-moving news and important information of global financial markets. Being a breakthrough in the local radio industry, Metro Finance provides the simulcast programmes with Radio Guangdong, Shanghai Media Group and Shenzhen News Radio 89.8, to report up-to-date information of the financial markets.
About Strategist
“Strategist” is a financial magazine in Hong Kong. It has been published continuously every Friday since its first issue in December 2014. It uses the simple and funny ways to express the financial news and information, widely attracting a lot of readers and successfully gaining a high market share just within few months. In August 14 2015, strategist has officially entered into online network that its website has been launched to provide real-time financial analysis, information, and the functions of Hong Kong stocks & futures quotes, in order to serve investors thoroughly.
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Realord Group included in the Hang Seng Stock Connect Hong Kong Index
(February 12, 2017 – Hong Kong) Realord Group Holdings Limited (“Realord” or the “Company,” together with its subsidiaries collectively known as the “Group,” stock code: 1196.HK) is pleased to announce that the Company will become a constituent stock of Hang Seng Stock Connect Hong Kong Index (“HSHKI”), Hang Seng Stock Connect Hong Kong MidCap & SmallCap Index ("HSHKMS") and Hang Seng Stock Connect Hong Kong SmallCap Index ("HSHKS"), with effect from March 6, 2017 (Monday).
Hang Seng Indexes Company Limited (“Hang Seng Indexes”) launched the Hang Seng Stock Connect Hong Kong Index Series (“Stock Connect Hong Kong Index Series” or “Index”) on 5 December 2016 to provide a benchmark for the performance of equities listed in Hong Kong that are eligible for trading via the southbound trading link of the Stock Connect Scheme. Stocks included in the Index must also be the constituent stocks of the Hang Seng Composite Index, with the up-to-standard turnover, HKD 5 billion or above average month-end market values of the past 12 months of any review period and fulfilling other selection criteria concerning specific categories and listing period.
Dr. Bryan Lin, Xiaohui, Chairman of Realord Group, said: "Being included into the Stock Connect Hong Kong Index Series reflects the Company has reached the requirements of market value or liquidity. It also proves that Company is qualified to become a constituent of Shenzhen-Hong Kong Stock Connect in the future. In recent years, Realord has developed a healthy and high-growth business model on the diversified opportunities in the market and has gradually gained the recognition of the capital market. We expect to show further momentum in this year to offer better returns to investors."
In addition to the update, Realord has also been included in Hang Seng Global Composite Index and the Hang Seng Composite Index Series (Hang Seng Composite Index, Hang Seng Composite MidCap & SmallCap Index, Hang Seng Composite Small Cap Index, and Hang Seng Composite Industry Index - Consumer Goods Industry and Service Index).
About Hang Seng Indexes
Hang Seng Indexes, managed by the Hang Seng Indexes Company Limited, select and represent listed companies that meet market capitalization and turnover screening requirements for a better reflection of the performance of the Hong Kong capital market. For more information on the Hang Seng Indexes, please visit
http://www.hsi.com.hk/HSI-Net/HSI-Net.
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Realord Chairman Dr. Bryan Lin wishes you a Happy New Chinese New Year
Dear shareholders and friends,
The year of monkey is almost gone while the year of Rooster is arriving.
The Chinese New Year is coming. On behalf of Realord Group, I would like to express my sincere greetings and best wishes to our friends, especially for our customers and our shareholders.
Over the past year, Realord Group acted like a monkey being determined in forging ahead, being open-minded to explore, being good at getting opportunities, being brave in facing challenges, and being diligent in climbing up to the top, so that our business could be achieved in a new level!
Over the past year, our group gradually expanded. The positioning of our property development is more vivid, focusing on Longhua District in Shenzhen. To respond and support the urban renewal policy adopted by the government, the Group is now preparing the application of an owned land situated in Longhua District, Shenzhen for transformation from industrial use to building commercial apartments or offices. In addition, the Group's environmental business is also ready to make contribution, Top Eagle International Trading Limited and its subsidiary Guangxi Wuzhou Tongbao Renewable Material Co., Ltd are engaged in the scrap metal materials recycling industry. More important, Tongbao is located in Wuzhou Import Renewable Resources Processing Park where is also known as the "national city minerals", one of the key demonstration bases of materials recycling in China, and the major recycling area in southern China. In particular, the local Guangxi government actively promotes and pushes the production of the park into a hundred billion RMB scale, so we, the board of directors, are optimistic on the prospects of renewable resources recycling. When it comes to our auto parts business, we will consider to expand and to set up more shops so as to obtain more market share.
Over the past year, our group has successfully built up a friendly and strong cooperation with different enterprises in the financial field. In May, our subsidiary Realord Manureen Securities Limited become a co-promoter with Guangdong Yue Chai Investment Holdings Limited, Shenzhen Hongjin Investment Holding Limited, Baoli Property Management Company Limited, Karl-Thomson Securities Company Limited and Eternal Pearl Securities Company to set up the Joint Venture Securities Company named Yuegang Securities Limited by equity participation in Guangzhou Pilot Free Trade Zone, Nanshan area in the PRC to carry out securities businesses China. We decided to spend RMB350 million to subscribe 10% equity interests of JV company, which is conductive to our future revenue. According to the China Securities Regulatory Commission, the current application of the license has entered to a review stage. Besides, in October, we and Guangdong Huaxing Bank Shenzhen Branch have entered into a strategic cooperation framework agreement with a total size of RMB5 billion which enables us complement the strengths and resources of each other. The amount of the agreement will likely be applied in property projects, industrial projects, mergers and acquisitions, credit facilities or cross-border financing activities of the Group.
What’s more, our Group received extensive attention from the investors. Following the constituted into FTSE Russell Global Index, MSCI Hong Kong Small Cap Index in 2015, Realord Group was selected as constituent stock on Hang Seng Family of Indexes in August last year, implying that the capital market has fully affirmed our Group’s outstanding performance and its potential.
A new Lunar Chinese year is approaching, we wish you all good luck in the year of Rooster. I wish Realord Group will continue to make every success in 2017. We must firmly grasp the chances in facing the unpredictable economic situation. We must roll up our sleeves to do the best, so as to create a higher value for customers, to create more returns for our shareholders, to create greater welfares for our staff. We, Realord Group, won’t forget our original intention and the mission. We will move forward altogether so as to achieve our “Realord Dream”!
Last but not least, I wish you good health and always the best in a new year!
Best Regards,
Bryan Lin
Chairman, Realord Group Holdings Limited
Annual Dinner 2017
The Chinese New Year is arriving. To thank all the staff for their industriousness and contribution to the Company, Realord Group Holding Limited (“Realord” or the “Company,” together with its subsidiaries collectively known as the “Group,” stock code: 1196.HK) hosted a dinner for them last night. At the beginning of dinner, Group Chairamn Dr. Bryan Lin and CEO Madam Suki Su gave a toast to all employees and wished them a good health and fortune in next Chinese New Year. Apart from delicious meal and wine, lucky draw should be the most exciting part in the night. The winners were joyful and satisfactory.
Gallery:
http://www.realord.com.hk/en/news_and_media/gallery/25/
Dr. Bryan Lin Proposes the Ways of Accelerating Urban Renewals to Promote Indemnificatory Housing in Shenzhen
The second session of the fifth Committee of Chinese People's Political Consultative Conference (hereinafter as "CPPCC") in Futian District, Shenzhen held as scheduled, Dr. Bryan Lin, Member of Shenzhen CPPCC, Member of Standing Committee of Futian District, Shenzhen CPPCC, and also Chairman of Realord Group Holding Limited (“Realord” or the “Company,” together with its subsidiaries collectively known as the “Group,” stock code: 1196.HK) suggested the measures to speed up the process of the land renewals, especially the change from industries to indemnificatory housing.
The orignal proposal written by Dr. Bryan Lin is as below:
(Currently English version is not available)
Realord Group Chairman Dr. Bryan Lin Suggests his proposal to leaders on Shenzhen CPPCC Symposium
The four-day Shenzhen Lianghui ("Two Annual Sessions"), including The Third Session of the Sixth Guangdong Shenzhen Municipal Committee of the Chinese People 's Political Consultative Conference (also known as "CCPPC") and The Third Session of the Sixth Committee of Shenzhen Municipal People's Congress started in the morning of 11th January 2017. At 5pm in 12th Jan, CPPCC held a forum for the members from Hong Kong and Macau at Shenzhen Hall of Wuzhou Guest House. Dr. Bryan Lin, Member of Shenzhen CPPCC, Member of standing committee of Futian District, Shenzhen CPPCC, and also Chairman of Realord Group Holding Limited (“Realord” or the “Company,” together with its subsidiaries collectively known as the “Group,” stock code: 1196.HK) attended the meeting and presented a suggestion named “Learning Hong Kong's elevated walkways to improve traffic and promote prosperity in Shenzhen”.
Party Secretary & Chairman of Shenzhen CPPCC Dai Beifang, Municipal Standing Committee & Executive Vice Mayor Zhang Hu, Municipal Standing Committee & United Front Minister Li Jie, Vice Mayor Ai Xuefeng, Deputy Party Secretary & Executive Vice Chairman Mr. Liu Runhua, Vice Chairman Huang Zhong wei, Chen Qianwen, Wang Pu, Zhang Xiaoli, Li Jun, Wang Daping, Secretary-General Zhao Yanmin, Director of the Hong Kong, Macao and Taiwan and Foreign Affairs Committee Pan Jiadong and other leaders attended the forum, totally 23 CPPCC members from Hong Kong & Macau gave their advices and suggestions.
Dr. Lin suggested the Shenzhen Government could learn from Hong Kong to establish its own elevated system to connect all major transport hubs and to form barrier-free walkways linking all the roads so as to create the economic benefits, to help optimize the strategy of “One Core, Two Corridors and Three Belts” plotted by the Shenzhen Government, especially strengthening the central area networks to promote prosperity.
After the forum, Mr. Lin expressed, “After years of routine from Hong Kong and Shenzhen, I found the elevated systems everywhere in Hong Kong are really sophisticated and convenient. Surely it is well-known all over the world. Such facilities are very suitable for Shenzhen, and I believe that our government has already been working on it. The elevated walkways system has been developing and improving by the Hong Kong Government for almost 47 years. So I hope, though this presentation, Shenzhen Government could have a more sustainable planning and cooperation with Hong Kong in the future ”
Realord Shares Business Updates at “9th Scaling New Heights Asia Investment Forum 2017”
(January 9, 2017 – Shenzhen) Realord Group Holdings Limited (“Realord” or the “Company,” together with its subsidiaries collectively known as the “Group,” stock code: 1196.HK) has taken part in the 9th Scaling New Heights Asia Investment Forum 2017 in Shenzhen. The group met over 20 institutional investors, fund managers and media from both Hong Kong and Mainland China at the forum.
Realord received an enthusiastic response on group meeting and one-on-one meetings at the Forum. Mr. Chan Ying Kay, Chief Financial Officer＆Company Secretary introduced the latest business development plan and situation of the Group, and had in-depth exchange with the participants.
During the media interview, Mr. Chan Ying Kay, Chief Financial Officer＆Company Secretary stated that, “Looking forward to 2017, the Group is going to have a great breakthrough in the environmental business segment of renewable resources in Guangxi Province. Also, the full licenses application of Yuegang Securities Company Ltd. is going smoothly.”
The 9th Scaling New Heights Asia Investment Forum 2017, presented by Financial PR (HK), Merlion Communications and Asia Fund Space was successfully held on 6th January 2017(Friday) at the JW Marriott Hotel Shenzhen. The Forum attracted over 200 institutional investors and 29 companies listed in Hong Kong, Mainland China and Singapore.
Mr. Chan Ying Kay, Chief Financial Officer＆Company Secretary for Realord introduced the latest news of the company to the investors during the group meeting at the 9th Scaling New Heights Asia Investment Forum 2017.
Mr. Chan Ying Kay, Chief Financial Officer＆Company Secretary for Realord had in-depth exchange with investors during the one-on-one meeting at the Forum.
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