Realord Technology (1196) H2 2023 earnings summary

Executive summary

• FY2023 revenue fell 33.1% YoY to HK$801.5m; profit for the year was HK$41.3m versus HK$602.6m, with results affected by weaker FX gains and property revaluation gains.

• Profit attributable to owners was HK$76.7m; total comprehensive expenses were HK$65.2m, including HK$124.0m of foreign-operation translation losses.

Financial highlights

• Revenue declined HK$397.3m YoY; EP and motor vehicle parts revenue fell HK$347.2m and HK$97.9m, partly offset by growth in financial services and LAC.

• Gross profit rose HK$32.0m to HK$319.4m, supported by higher-revenue contributions from financial services and LAC, which had relatively higher gross profit ratios.

• Other gains fell to HK$58.2m from HK$341.9m; net FX gain was HK$59.4m versus HK$358.1m, mainly from translation of RMB-denominated liabilities.

• Investment-property fair value gain was HK$1,097.8m; after deferred tax, the gain was HK$828.6m versus HK$1,203.6m in FY2022.

• Finance costs rose HK$38.6m to HK$766.4m; income tax expense was HK$279.3m versus a HK$234.1m credit, and basic EPS was HK5.32 cents versus HK7.83 cents.

Outlook and guidance

• Financial services was expected to achieve stable growth in 2024, supported by investment products, expanded sales and business teams, and anticipated gradual market recovery.

• Property priorities include advancing five Shenzhen projects; Qiankeng redevelopment began after construction-permit approval, while other projects remain subject to government approvals.

• EP, commercial printing and department stores will emphasize cost control, credit-risk reduction and customer-base expansion; motor vehicle parts operations will remain cost cautious amid the shift to EVs.

• Caribbean and Latin American plans include exploring projects in four additional Caribbean countries and a Panama power-generation project, subject to feasibility work, partners and government approvals.