Digital China Announces FY08/09 Annual Results
Posted on: Wednesday, 17 June 2009, 08:32 CDT
HONG KONG, June 17 /PRNewswire-Asia/ --
Highlights:
For the year ended 31 March 2009:
-- Turnover was HK$42,326 million, up 20.10% from FY07/08
-- Operating income was HK$884 million, an increase of 35.82% over the
corresponding period of last financial year
-- Gross Profit amounted to HK$2,959 million, up from HK$2,511 million
in FY07/08
-- Profit attributable to the equity holders of the parent was HK$641
million, a 59.84% growth as compared to FY07/08
-- Net cash inflow from overall operating activities was HK$727
million, a record improvement from the corresponding period of last
financial year
China's leading integrated IT service provider, Digital China Holdings
Limited ("Digital China" or the "Group"; Stock Code: 00861.HK) announced its
annual results for the year ended 31 March 2009 ("FY2008/09").
"We are extremely proud of Digital China's achievement for the year," said
Mr. Guo Wei, Chairman and CEO of Digital China. "Amid challenging market
conditions and a period of evolving market dynamics, we managed not only to
deliver on all our performance targets, but also made significant inroads to
seize the opportunities presented by the rapid growing China IT market. As we
successfully implemented our 'customer-focused and service-oriented' strategy,
we took considerable steps forward in the acquisition of large customers while
delivering spectacular results in business transformation and operation risk
control."
Financial Review
During the year under review, turnover was HK$42,326 million, an increase
of 20.10% as compared to HK$35,244 million for the corresponding period of
last financial year. Gross profit was HK$2,959 million, representing a year on
year increase of 17.83%. Gross margin was 6.99%, compared to 7.12% for the
last fiscal year. Profit attributable to the equity holders of the parent
(profit attributable to shareholders) surged 59.84% to HK$641 million as
compared to HK$401 million for the corresponding period of last financial year.
Basic earnings per share were 66.58 HK cents, a year on year increase of
52.29%. Return on shareholders' equity was 20.42%, up from 33.64% for the
corresponding period of last financial year.
Given the changes in the economic environment, the Group stepped up with
transformation at all business segments to introduce the value-added models.
The Services Business ranked as No. 1 in the market and continued to report
profit. This business segment made significant inroads in the acquisition of
large customers, while the application software solution capabilities were
also substantially improved. The Group's products support and IT outsourcing
and maintenance services (PSOM) also reported robust growth during the period
under review.
Besides, to effectively cope with growing severity in the economic
conditions both abroad and at home, the Group exercised stringent cost
management policies. During the period under review, overall operating
expenses ratio was 5.96%, lowered from 6.46% for the last fiscal year. Besides
cost management, the Group also made persistent efforts in risk management and
process management, and as a result a stable overall operating cash flow was
maintained during the year. Net cash inflow from overall operating activities
of the Group was HK$727 million up from HK$77 million for the corresponding
period of last financial year. Overall cash turnover was 23.66 days, an
improvement as compared to 25.02 days for the last fiscal year.
Segment Results
For the year ended 31 March
(HK$ million) 2009 2008 Change (%) YoY
Distribution Business
Turnover 24,087 20,889 15.31
Gross profit 1,035 966 7.14
Segment Results 289 339 -14.82
Systems Business
Turnover 13,356 9,731 37.24
Gross profit 1,267 906 39.89
Segment Results 429 410 4.57
Services Business
Turnover 4,883 4,622 5.64
Gross profit 655 638 2.70
Segment Results 88 71 22.83
Business Review
Services Business
During the year under review, the Service Business, which primarily
focuses on industry market, maintained its rapid growth momentum and
contributed 11.54% to the total revenue. Operating profit for the segment
increased 22.83% to HK$88 million, from HK$71 million for the last fiscal year.
Seizing on the opportunities presented by the telecom industry restructuring
and 3G rollout in China, the Group recorded substantial growth in new
contracts from the telecommunication sector. The Group also maintained steady
growth in the financial and government sectors. During the year under review,
the Group's ModelB@nk 2.0 solution was successfully applied in city commercial
bank clients and more domestic and foreign banks were signed up for the
Group's IT service. In the public sector, the Group's digital municipal
service was expanding rapidly through different government departments
together with the successful application of the Citizen Card solution and
public transport system dispatching solution. For the year ended 31 March 2009,
total contract value grew by 114% as compared to the previous fiscal year.
Systems Business
Turnover and Operating income for the Systems Business, which primarily
focuses on enterprise market, increased by 37.24% and 4.57% year on year to
HK$13,356 million and HK$429 million respectively. During the year under
review, the Group has built-up in know-how and servicing capabilities and
capitalized on a broader range of business opportunities. At the same time,
new inroads were made in "IT systems integration services" for enterprises and
"emergency command post systems" for local governments which also contributed
to the solid growth of this business segment.
Distribution Business
Turnover and Operating income for the Distribution Business, which
primarily focuses on SMB and consumer markets, increased by 15.31% and
decreased by 14.82% year on year to HK$24,087 million and HK$289 million,
respectively. Sales of notebooks and accessories recorded substantial growth
primarily because of the launch of new products from Dell and Apple. Growth in
turnover for the year also reflects the expanding coverage of its sales
operation. Cities covered increased by 18.14% year on year. Turnover
contributed by 4th- to 6th-tier cities increased by 51.4% as compared to the
previous financial year.
Outlook
"Our business model is a proven success and is able to perform well even
in a challenging economic environment. As we are off to a promising start in
fiscal year 2009/10, the management has designated it as the 'Year of
Strategic Marketing'," said Mr. Guo Wei, Chairman and CEO of Digital China.
"We have adjusted our organizational structure to match up with our growth
plan which will extend our software and solution offerings and further
diversify our customer base. We believe this will enable us to take advantage
of market transitions and drive toward our long-term growth objectives."
About Digital China
Digital China was listed on the main board of The Stock Exchange of Hong
Kong in 2001 under stock code "00861.HK" following a successful spin off from
the Legend Group. In pursuit of its "Digitalized China" corporate strategy,
Digital China is focused on providing its customers with pioneer electronic
business platforms, solutions and services. A one-stop IT services concept,
available to individual consumers and large enterprises alike, enables its
client base to span across a wide range of different industries, from banking
and telecommunications to government and public sectors. Leveraging on its
strong partnership with over 100 top IT vendors world-wide, Digital China has
become the largest integrated IT service provider in China.
Digital China provides fully integrated IT services to customers with
different needs and at various stages of development to create value and
success for them. For further information on its products and services, please
visit http://www.digitalchina.com.hk .
For investor and media inquiries:
Wycee Liu
Digital China Holdings Limited
Tel: +852-3416-8089
Email: liuyqa@digitalchina.com
Winnie Wang
Digital China Holdings Limited
Tel: +852-3416-8090
Email: wangminh@digitalchina.com
Vivian Shi
Digital China Holdings Limited
Tel: +852-3416-8076
Email: vivianshi@digitalchina.com
Jane Liu
PRChina
Tel: +852-2522-1838
Email: jliu@prchina.com.hk
Henry Chik
PRChina
Tel: +852-2522-1368
Email: hchik@prchina.com.hk
Eric Song
PRChina
Tel: +852-2522-1368
Email: esong@prchina.com.hk
CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2009
2009 2008
HK$'000 HK$'000
REVENUE 42,326,342 35,243,773
Cost of sales (39,367,767) (32,732,995)
Gross profit 2,958,575 2,510,778
Other income and gains 447,701 417,965
Selling and distribution costs (1,701,244) (1,548,118)
Administrative expenses (372,297) (394,624)
Other operating expenses, net (449,053) (335,350)
Total operating expenses (2,522,594) (2,278,092)
Finance costs (159,091) (207,791)
Share of profits and losses of:
Jointly-controlled entities (40) (880)
Associates 11,671 11,052
PROFIT BEFORE TAX 736,222 453,032
Tax (126,936) (52,152)
PROFIT FOR THE YEAR 609,286 400,880
Attributable to:
Equity holders of the parent 641,145 401,125
Minority interests (31,859) (245)
609,286 400,880
DIVIDENDS - Proposed final 140,030 140,210
EARNINGS PER SHARE ATTRIBUTABLE TO
ORDINARY EQUITY HOLDERS OF THE PARENT
Basic 66.58 HK cents 43.72 HK cents
Diluted N/A 42.91 HK cents
CONSOLIDATED BALANCE SHEET
At 31 March 2008
2009 2008
HK$'000 HK$'000
NON-CURRENT ASSETS
Property, plant and equipment 397,767 401,124
Investment properties 238,516 234,212
Prepaid land premiums 14,671 14,765
Intangible assets 4,233 5,526
Interests in jointly-controlled entities 6,201 7,894
Interests in associates 23,409 35,612
Available-for-sale investments 101,496 31,611
Deferred tax assets 24,176 19,480
Total non-current assets 810,469 750,224
CURRENT ASSETS
Inventories 2,136,461 2,559,364
Trade and bills receivables 5,471,493 3,772,820
Prepayments, deposits and other
receivables 1,366,277 1,233,629
Derivative financial instruments 27,097 --
Cash and bank balances 1,734,428 998,454
Total current assets 10,735,756 8,564,267
CURRENT LIABILITIES
Trade and bills payables 4,697,703 3,334,519
Other payables and accruals 1,681,331 1,695,420
Tax payable 133,010 66,405
Interest-bearing bank borrowings 875,449 400,066
Total current liabilities 7,387,493 5,496,410
NET CURRENT ASSETS 3,348,263 3,067,857
TOTAL ASSETS LESS CURRENT LIABILITIES 4,158,732 3,818,081
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings 701,516 952,803
Bond payable 226,296 221,582
Total non-current liabilities 927,812 1,174,385
NET ASSETS 3,230,920 2,643,696
EQUITY
Equity attributable to equity holders
of the parent
Issued capital 96,239 96,362
Reserves 2,903,667 2,389,347
Proposed final dividend 140,030 140,210
3,139,936 2,625,919
Minority interests 90,984 17,777
TOTAL EQUITY 3,230,920 2,643,696
SOURCE Digital China Holdings Limited
Source: PR Newswire
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