NEV Solutions Business Outperforms Market: Revenue Surges 153%
Continuous Investment in R&D: Increases to 7.4% of Revenue for The First Half Year
(28 August 2019, Hong Kong) – Intron Technology Holdings Limited (“Intron Technology” or the “Group”; HKEX: 1760), a fast-growing automotive electronics solutions provider in China, has announced its interim results for the six months ended 30 June 2019 (“the first half of 2019” or “the review period”). During the review period, the Group delivered a better-than-market performance despite market headwinds, thriving on continual rapid growth of its New Energy Vehicle (“NEV”) Solutions business. Meanwhile, the Group continued to invest in research and development (“R&D”) to reinforce its leading position in the market.
In the first half of 2019, despite negative performance of the overall automotive industry, the Group was able to deliver a revenue growth of 25% year-on-year to RMB1,091.5 million thriving on its robust development in NEV solutions business. Gross profit increased by 28% year-on-year to RMB 236.1 million, gross profit margin was 21.6% (1H2018: 21.1%). During the period, the increase in revenue together with associated increase in costs and expenses, and higher interim expenses in R&D had resulted in net profit decrease of 9% year-on-year to RMB 62.8 million, net profit margin was 5.8% (1H2018: 7.9%). The variance was mainly due to 2% higher investment as percentage of sales in R&D for the same period last year. At the operating level, excluding R&D expenses, the net profit margin was maintained at the same level as last year.
Under challenging operating environment, the Group stepped up its investment in R&D, especially the NEV sector and the Advanced Driver-assistance System (“ADAS”) sector, to capture market share. R&D investment has increased to 7.4%, compared to 5.4% for same period last year. As at 30 June 2019, the Group had 509 full-time R&D-related professionals, making up 66% of its total employees. The Group had also secured 58 patents and 98 software copyrights, an increase of 12 patents and 21 software copyrights respectively over the corresponding period of last year.
Mr. Davy Luk, Chairman, Co-CEO and Executive Director of Intron Technology, said, “In the first half of 2019, despite negative performance of the overall automotive industry in China, the Group was able to deliver continual business growth thriving on its robust development in NEV revenue segment. This is achieved through years of experience and leadership in providing automotive electronic solutions especially in the NEV market. The Group is committed on its strategy of continual investment in R&D, laying foundation for future sustainable growth.”
In the first half of 2019, revenue from Intron Technology’s NEV Solutions business amounted to RMB 575.4 million, representing a substantial increase of 153% year-on-year. This segment remained as the Group’s major growth driver. The Group expects its new energy related business to continue its growth momentum, the Group, as a leading player in the industry, will see sustainable business performance in its NEV Solutions business that outperforms the market in general. Amidst the weak overall performance of the Chinese domestic brand automotive market due to destocking situation, the Group’s Body Control, Safety and Powertrain Solutions businesses reported decrease of 23%, 24% and 13%, respectively, which were in line with the general market condition. Nevertheless, the Group believes that market demand for the Group’s value-added solutions will increase in future with rising demand for automotive electronics solutions as well as the accelerating localisation of vehicle production process. Furthermore, in line with market conditions, revenue from the Group’s Industrial Solutions segment decreased by 19% to RMB82.2 million as global enterprises became more prudent in their investments in data centres and cloud servers.
Mr. Eddie Chan, Co-CEO and Executive Director of Intron Technology, said, “Looking ahead, although the overall market environment remains challenging, the Group will keep abreast on latest industry development and remain committed to R&D investment in both human talent and leading-edge facilities. The Group will also forge strategic cooperation with world leading research enterprises and institutions to build innovative international R&D system, so as to reinforce the Group’s leading position in the market. Given its years of industry experience, leading core technologies and solid relationships with its customers, the Group is confident of continually expand its market share, drive business growth and generate satisfactory returns for shareholders.”
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About Intron Technology Holdings Limited (英恒科技控股有限公司)
Intron Technology Holdings Limited is a fast-growing automotive electronics solutions provider in China focuses on providing solutions targeting critical automotive electronic components applied in New Energy, Body Control, Safety and Powertrain systems. The Group utilises its research and development and engineering capabilities to provide solutions incorporating advanced semiconductor devices to help OEMs achieve industry leading performance.
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