Willas-Array Electronics Holdings has reported earnings of HK$92.5 million ($15.8 million) for the FY2021 ended March, reversing from its losses of HK$72.6 million in the FY2020.

FY2021 revenue increased 12.1% y-o-y to HK$3.56 billion due to higher sales across its top three segments – Industrial, Home Appliance and Automotive, which contributed to over 50% of the group’s total revenue.

The group’s Automotive segment registered the highest revenue growth at 31% y-o-y driven by the accelerated development of electric vehicles (EVs).

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The segment also enjoys better economic and business policies as it has been identified by the Chinese government as a key driver of its growth.

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The Industrial and Home Appliance segments benefitted from the new norms that emerged from the Covid-19 pandemic. The Industrial segment saw a 19.3% y-o-y growth, while the Home Appliance segment registered a 3.0% y-o-y growth.

Gross profit surged 61.8% y-o-y to HK$333.6 million on the back of higher gross margin (GPM), which rose from 6.5% to 9.4% in the FY2021.

The higher GPM was also due to higher revenue from the segments that required the group’s value-added services.

Other contributors include the significant decrease in clearance of buffer stocks and a reversal of stock provision over the FY2021.

“With the current focus on climate change, the need to achieve carbon neutrality through power saving and energy efficiency equipment, appliances, electronic goods and even electric vehicles has led to new applications being created for electronic components. The demand is very strong as can be seen from the global shortage in chips,” says Willas-Array’s chairman, Lawrence Leung.

SEE:Willas-Array reports 3Q21 earnings of $6.4 mil, marking third straight profitable quarter

“Willas-Array intends to capitalise on these trends and seize these opportunities. I believe we are in a strong position to do so given our longstanding supplier and customer partnerships and our track record for working closely with our partners to develop new applications that will achieve mutual goals,” he adds.

As at March 31, the group recorded a cash balance of HK$216.9 million.

Net gearing ratio stood at 39.6% as at March 31.

The group has recommended a final dividend of 33 HK cents per share for the FY2021, payable on Aug 27.

The group says it is cautiously optimistic that its main market in China will remain resilient and continue its strong recovery.

“Despite the positive outlook for our domestic China market, we are mindful that the Covid-19 situation remains fluid as some countries have experienced a resurgence and found new strains of the virus in spite of aggressive vaccination programmes. This could lead to a return to tighter movement control and partial lockdowns, which will in turn affect the global economy at large,” says Leung.

“As such, the group remains in belt tightening mode as we brace ourselves to weather the ongoing challenges brought on by the pandemic. We intend to continue building for a sustainable future by investing our resources into key growth sectors while ensuring that we have sufficient funds for working capital needs.”

Shares in Willas-Array closed 1.5 cents lower or 2.1% up at 71.5 cents on May 28.