Analogue Holdings Limited (“Analogue” or the “Company”, together with its subsidiaries, collectively the “Group”) (stock code: 1977), a leading electrical and mechanical (“E&M”) engineering service provider in Hong Kong, today announced its interim results for the six months ended 30 June 2022 (“the Period” or “1H2022”), having achieved revenue growth and record-high contracts-in-hand amid market challenges. The Group’s total revenue grew by 29.5% year-on-year to HK$3,022 million, mainly attributable to the increase in revenue from the Building Services segment. Gross profit also soared by 41.6% year-on-year to HK$457.6 million, thanks to the higher revenue and higher margins from the Building Services segment. The gross profit margin improved to 15.1%. Consolidated net profit would have increased by 5.9% year-on-year to HK$119.2 million before provision for potential litigation liabilities, with the profit attributed to owners of the Company reported at HK$59.2 million. The Board has proposed an interim dividend of HK4.27 cents per share, representing a dividend payout ratio of 50%.

— Record-high contracts-in-hand amounted to HK$12.9 billion, up 8.8% year-on-year
— Total revenue increased by 29.5% to HK$3,022 million
— The consolidated net profit at HK$119.2 million before provision for potential litigation liabilities. The profit attributed to owners of the Company reported at HK$59.2 million
— Gross profit margin rose from 13.8% to 15.1% year-on-year
— Healthy cash position with cash balance amounting to HK$1,073.7 million
— High dividend payout ratio maintained at 50%

The value of contracts awarded to the Group during the Period grew significantly by 96.6% year-on-year, while its contracts-in-hand also reached a record high of HK$12,919 million as at 30 June 2022, providing a strong foundation for the core business’ further expansion. The Group’s tendering activities remained active during the Period, with 675 tenders or quotations valued at over HK$1 million each.

Dr. Otto Poon Lok-to, Chairman of Analogue Holdings Limited, said, “Despite the many challenges encountered, I believe we have made a good start in 2022, maintaining growth in business scale and new contract wins, as well as achieving record-high contracts-in-hand. Over the course of the Group’s 45-year journey, we are honoured to have fortified our leading position in the industry, kept abreast of developments over the years and continued to adhere to and reinforce the best business practices. Leveraging our ‘New Technology, New Market, New Business Model’ master plan, we are well positioned to enjoy a more advantageous and distinguished position in the industry and to sustain the long-term growth of our business.”

As the Group’s major growth driver, Building Services segment’s revenue increased by 43.7% to HK$2,036 million. Its recurring revenue stream increased with new maintenance contracts worth more than HK$127 million secured. Contracts-in-hand of this segment reached HK$6,391 million, in which HK$3,534 million were newly secured projects, including infrastructure, shopping malls, office buildings, data centres, residential developments and hotels in Hong Kong, Macau as well as the Mainland China. Moreover, in view of the urgently-needed capacity of mortuaries due to the increase in mortality rate during the COVID wave in 1H2022, the Group proactively adopted its proprietary ATAL Building Services Prefabrication and Modularisation Construction Technology (“ABSPM”) coupled with digitalisation technologies for improved quality, safety, cost and project management of a public mortuary project, and successfully completed it by mobilising teams of workers on very short notice. Leveraging its strong track record, the Group is well placed to seize the upcoming business opportunities generated from the rapid development of data centres, as well as the expansions of railway lines and hospitals in Hong Kong.

As of 30 June 2022, Environmental Engineering segment’s contracts-in-hand amounted to HK$4,953 million, including five new contracts that underscore our expertise in project management services, as well as operation and maintenance contracts for electrical and mechanical works for water, wastewater and solid waste management. The Group will continue to implement innovative approaches for reinforcement, protection, operation and maintenance of treatment plants to extend their working life and ensure they are operated and maintained at optimal capacity to serve the Hong Kong community. On the research and development (R&D) front, the Group’s proprietary “Digital Twin technology” was further advanced to monitor the influent quality of incoming sewage at a sewage plant in a more efficient manner. Tendering activities outside Hong Kong and the Mainland China included water treatment works at Kaliwa and Wawa, both in the Rizal Province of the Philippines.

Information, Communications and Building Technologies (“ICBT”) segment’s contracts-in-hand rose by 13.0% year-on-year to HK$1,059 million. To support the development of Hong Kong’s “Smart City” and “Smart Economy” visions, the Group has spared no effort in adopting green and intelligent building solutions which integrate a wide range of information and communications technologies with AI, robotic solutions, energy and management technologies. As a result of its strong R&D capabilities, the Group’s AI Energy Management Platform, Internet of Things (“IoT”) applications, Video Analytics technology, and “walkable” Photovoltaic (“PV”) have been chosen for a world-class 36-storey smart office and commercial building project in Central, Hong Kong’s prestigious CBD. Going forward, the Group will continue to deploy digital technologies to its maintenance service capabilities and invest to drive digital transformation across smart building technologies.

The Lifts and Escalators segment’s contracts-in-hand amounted to HK$516 million as of 30 June 2022, with the majority of profit contributed by maintenance contracts. In the overseas markets, our Anlev Elevator Group (“Anlev”) secured strategic orders for mass transportation in Brazil and the hotel industry in Mexico. It is also finalising orders for an iconic and prestigious residential project in the United Kingdom through its wholly owned subsidiary Anlev (UK) Limited. To further expand its global footprint, the Group will seek new distributors in the United States, Europe and Southeast Asia. In parallel, the Group is completing a RMB60 million expansion of its Nanjing factory facilities to increase production capacity for lifts and escalators to meet the anticipated demand and growth of the global business.

In 2022, the Hong Kong Government has budgeted a steady increase of spending on public capital works projects of at least HK$100 billion in each of the coming years. Additionally, the annual construction output is estimated to reach HK$300 billion, which will include a variety of public and private housing, commercial development and infrastructure projects in new towns. An expenditure of HK$200 billion is also expected as part of the 10-year Hospital Development Plan with a further HK$300 billion investment in the second 10-year Hospital Development Plan. All of these plans, together with Hong Kong’s Smart City and Smart Economy visions, the thriving development of data centres and expansion projects of mass transit railway in Tung Chung, Hung Shui Kiu, Tuen Mun and Kwu Tung present tremendous opportunities. The Group is well-positioned to capitalise on these many growth opportunities and add value to customers by leveraging its capacity for innovation, digital technology, and passion to deliver results more effectively, efficiently and sustainably.

Leveraging its successful experience in equity partnership with Transel Elevator & Electric Inc. (“TEI”), one of the largest independent lifts and escalators companies in New York, and the establishment of Anlev subsidiaries in the United Kingdom, the Group will seek synergistic business partners where appropriate to expand its footprint, create new business opportunities and build new revenue streams.

Dr Poon concluded, “Being buoyed by the ‘can-do spirit’ of the new Hong Kong SAR Administration, we will grasp the tremendous opportunities arising from the increasing infrastructure development moving onward, leveraging our depth of expertise and experience in the industry. In addition to the local market, we are also cautiously optimistic about the development opportunities in various overseas countries that are now proceeding with major infrastructure developments, which have added motivation to our global expansion efforts. With our motto ‘We Commit, We Perform, We Deliver’, we have confidence that Analogue will witness further business growth in the years to come.”

For more details of the 2022 Interim Results, please refer to the announcement that has been filed with The Stock Exchange of Hong Kong Limited.

About Analogue Holdings Limited
Established in 1977, Analogue Holdings Limited is a leading electrical and mechanical (“E&M”) engineering service provider headquartered in Hong Kong, with operations in Macau, Mainland China, the United States and the United Kingdom. Serving a wide spectrum of customers from public and private sectors, the Group provides multi-disciplinary and comprehensive E&M engineering and technology services in four major segments, including Building Services, Environmental Engineering, Information, Communications and Building Technologies (“ICBT”) and Lifts & Escalators.

The Group also manufactures and sells Anlev lifts and escalators internationally and has entered into an alliance with Transel Elevator & Electric Inc. (“TEI”), one of the largest independent lifts and escalators companies in New York, the United States. The Group’s associate partner, Nanjing Canatal Data Centre Environmental Tech Company Limited (603912.SS), is specialised in manufacturing of precision air conditioners.

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