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Valuetronics’ FY2024 earnings up by 29.8% y-o-y to HK$159.6 mil on better margins and higher interest income

Felicia Tan
Felicia Tan • 3 min read
Valuetronics’ FY2024 earnings up by 29.8% y-o-y to HK$159.6 mil on better margins and higher interest income
The group has recommended a final dividend of 9 HK cents per share and a special dividend of 8 HK cents per share. Photo: Stock image
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Valuetronics has reported earnings of HK$159.6 million ($27.6 million) for the FY2024 ended March 31, 29.8% higher y-o-y. The higher earnings were attributed to improved margins and higher interest income.

While total revenue fell by 17.1% y-o-y to HK$1.67 billion as both segments – industrial & consumer electronics (ICE) and consumer electronics (CE) – fell on a y-o-y basis, gross profit was up by 1.3% y-o-y to HK$265.2 million.

Gross profit margin improved by 2.9 percentage points to 15.9% due to the easing of component shortages, the stabilisation of the costs of material and the depreciation of the Chinese renminbi (RMB).

Revenue for ICE fell from the lower demand from some of Valuetronics BN2 -

’ existing customers and was mitigated by revenue contribution from new customers. Revenue for CE also fell from the decrease in demand from existing CE customers and offset by revenue from new CE customers.

Other income and gains surged to HK$55.2 million from HK$21.2 million in the year before while overall operating expenses and finance costs were largely maintained.

Earnings per share (EPS) stood at 38.6 HK cents on a diluted basis.

See also: Fortress Minerals reports 7.6% lower y-o-y earnings for 1QFY2025

The group has recommended a final dividend of 9 HK cents per share and a special dividend of 8 HK cents per share. This brings its total dividend for the FY2024 to 25 HK cents a share, which represents a dividend payout ratio of 64.3% of its earnings for the year.

As at March 31, cash and cash equivalents stood at HK$1.16 billion, up from HK$1.01 billion in the corresponding period the year before.

“Our strategic initiatives to diversify our customer base have shown promising results in FY2024. We successfully onboarded a new CE consumer, who supplies products to a leading global entertainment conglomerate, and an ICE customer, specialising in network access solutions. Both of these new customers began contributing to our revenue in the second half of FY2024, partially offsetting the slower demand from our existing customers,” says Ricky Tse Chong Hing, chairman and managing director of Valuetronics.

See also: Temasek’s net portfolio value up 1.83% y-o-y to $389 bil on its 50th anniversary

“This also reflects a rebalance of our customer portfolio, allowing us to allocate more resources towards higher-growth potential and better margin customers,” he adds.

Looking ahead, the group expects the high-interest-rate environment to persist into the FY2025 as the timing of the rate cuts as well as the magnitude remain uncertain. As such, this may lead to lowered demand from its end customers with high interest rates and inflation likely to slow enterprise expansion and reduce capital expenditure.

Despite that, it says it will focus on exploring new projects with existing customers and seek to attract new customers. It adds that its strategic manufacturing solutions in Vietnam also puts it in a good position to “meet evolving customer needs amidst geopolitical uncertainties”.

“Looking ahead, the group remains confident in its ability to navigate the evolving landscape. Supported by a strong balance sheet, a diverse customer base, and a proven track record of operational excellence, the company expects to remain profitable for FY2025, barring unforeseen circumstances,” says Valuetronics in its May 29 statement.

Since it announced its HK$250 million share buyback programme on Feb 28, 2022, the group has bought some HK$79.0 million – or 26.2 million shares – back from the market.

Shares in Valuetronics closed at 64.5 cents on May 28.

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