Optimized Business Structure and Remarkable Improvement in
Profitability Proves Success of Business Transformation Strategy
(12 March 2017, Hong Kong) China Goldjoy Group Limited (“China Goldjoy” or the “Group”; HKEX: 1282) today announced its annual results for the year ended 31 December 2016 (the “Year”). 2016 marked a significant year for the Group’s development as its business transformation strategy has proved to be a huge success as reflected by remarkable results.
During the Year, the Group’s revenue jumped by 39.9% to approximately HK$995.6 million (2015: HK$711.8 million). This surge was mainly attributable to increased revenue generated from the (i) existing Automation segment; (ii) Securities Investment segment; and (iii) the newly added Financial Services segment. Gross profit improved by a marked 78.7% to approximately HK$473.4 million (2015: HK$264.9 million), while gross profit margin climbed to 47.6% (2015: 37.2%). Profit attributable to owners of the Company soared, rising by 156.8% to approximately HK$466.6 million (2015: HK$181.7 million).
The Board recommends the payment of a final dividend of HK$0.32 cents per share (2015: HK$0.25 cents).
With the further opening of the financial markets in China, especially via Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, great opportunities were brought to the Hong Kong financial market. To grasp the huge business opportunities that have emerged, the Group stepped up implementation of the business transformation strategy eliminating the low-profit and low value-added electronic manufacturing business and increasing its investment in high value-added business. The remarkable results are a testament to its effective transformation strategy.
Automation
The automation business recorded a significant increase in revenue of 60.7% to HK$553.7 million (2015: HK$344.5 million), accounting for 55.6% of total revenue (2015: 48.4%) and remaining the major revenue contributor.
Financial Services
Revenue from the new financial services segment was HK$85.0 million, accounting for 8.6% of total revenue (2015: N/A). With China embarking on a new efforts to open her economy to foreign investment, the Group has sought to capitalize on this development by establishing a platform in the financial services market in Hong Kong and by acquiring 80% interest in six subsidiaries in 2016. Such efforts have marked China Goldjoy’s entry into the Hong Kong financial service market. Through the acquired subsidiaries, the Group holds a full suite of financial service licenses, enabling it to expand a more comprehensive financial business and provide clients with high-quality financial services that are linked with the China and overseas markets.
Manufacturing
As a result of the Group’s strategy to eliminate its low-margin and low value-added electronic manufacturing business, revenue from this segment recorded a significant drop of 64.0% to HK$58.1 million (2015: HK$161.6 million), hence accounting for 5.8% (2015: 22.7%) of total revenue. At the same time, the Group has been seeking opportunities to transform and upgrade its manufacturing business, as well as achieve supply-side reform in order to enter the high-end manufacturing industry which has higher added-value.
Securities Investment
Revenue from the Securities Investment segment climbed 45.3% to approximately HK$298.8 million (2015: HK$205.7 million), accounting for 30.0% of total revenue (2015: 28.9%). The inclusion of this business since 2015 has proven to be successful in broadening the sources of revenue of the Group and offering better returns to shareholders.
Business Outlook
In view of the enormous growth potential that the financial services markets in the Greater China region possesses, and the vast opportunities arising from Shanghai-Hong Kong Stock Connect and the newly launched Shenzhen-Hong Kong Stock Connect, China Goldjoy will continue to enhance its capability to provide even more comprehensive financial services, as well as expand its business coverage of the Greater China market.
In January 2017, the Group’s financial services arm was granted a Type 6 License by the Securities and Futures Commission, enabling it to perform corporate finance related activities. This has strengthened the Group’s financial service portfolio and capabilities for capturing future business opportunities.
Drawing on its competitive edges, the Group will continue to seek investment opportunities in financial services, the assurance and reassurance industry, high-end manufacturing industry, health, and new energy and new technologies as it endeavors to generate optimal returns for its shareholders.
Going forward, developing diversified and value-added businesses will remain the Group’s focus. China Goldjoy will take a cautious approach as they seek to continuously optimize its business and financial performance. While striving to steadily transform the Group’s business, the interest of the Group’s shareholders will remain its principle concern.
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About China Goldjoy Group Limited (HKEX: 1282)
China Goldjoy Group Limited is principally engaged in trading and providing services with respect to automation related equipment; financial services, manufacturing and securities investment. Since May 2016, the Group has ventured into financial services and is growing it as a principal business. The Group is pushing forward with transforming its business at full thrust, aiming to turn itself into a high value-added and well-diversified business and eliminate its low-margin and low value-added electronic manufacturing operations. Its new focus is on the development of comprehensive financial services, asset management and emerging industries. Currently, through its licensed subsidiaries, the Group is providing asset and wealth management, securities, futures, precious metals trading and credit financing services in Hong Kong and operating private equity funds in the PRC. The Group holds a full suite of financial service licenses under the Securities and Futures Ordinance (“SFO”), namely Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 6 (performing corporate finance related work) and Type 9 (asset management). As for pursuit of business opportunities in emerging industries, China Goldjoy has set its eyes on the new energy industry and light-emitting diode (LED) manufacturing business.
China Goldjoy is the constituent of several Hang Seng indexes, including Hang Seng High Beta Index, Hang Seng Internet & Information Technology Index, Hang Seng Global Composite Index, Hang Seng Composite Index Series – Hang Seng Composite Index, Hang Seng Composite Industry Index – Information Technology, Hang Seng LargeCap & MidCap Index, Hang Seng MidCap & SmallCap Index and Hang Seng MidCap Index. The Group is one of the stocks eligible for trading in Mainland China under the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect schemes. Company website: www.hk1282.com
