L K Technology : 2022/23 INTERIM REPORT

Financial Highlights

Corporate Information

Management Discussion and Analysis

Other Information

Report on Review of Interim

Financial Information

Condensed Consolidated Statement of

Financial Position

Condensed Consolidated Income

Statement

Condensed Consolidated Statement of

Comprehensive Income

Condensed Consolidated Statement of

Changes in Equity

Condensed Consolidated Statement of

Cash Flows

Notes to the Condensed Consolidated

Interim Financial Information

FINANCIAL HIGHLIGHTS

	(Unaudited)
	Six months ended 30 September
	2022	2021	Change
	HK$'000	HK$'000	%
Operating results:
Revenue	2,860,238	2,773,518	3.1%
Gross profit	786,158	805,456	-2.4%
Gross profit margin	27.5%	29.0%	-1.5%
Operating profit	343,164	415,114	-17.3%
Operating profit margin	12.0%	15.0%	-3.0%
Profit attributable to owners of the Company	271,193	323,845	-16.3%
Net profit margin	9.5%	11.7%	-2.2%
	HK cents	HK cents
Basic and diluted earnings per share	19.7	23.7	-16.9%
	(Unaudited)	(Audited)
	At 30 September	At 31 March
	2022	2022	Change
	HK$'000	HK$'000	%
Financial position:
Total assets	7,747,910	7,599,524	2.0%
Net assets	3,559,470	3,702,999	-3.9%
Net current assets	1,278,139	1,343,572	-4.9%
Cash and cash equivalents	610,977	576,790	5.9%
Total borrowings	1,479,108	1,088,637	35.9%

L.K. Technology Holdings Limited

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CORPORATE INFORMATION

BOARD OF DIRECTORS

Executive Directors

Ms. Chong Siw Yin (Chairperson)

Mr. Liu Zhuo Ming (Chief Executive Officer) Mr. Tse Siu Sze

Independent Non-executive Directors

Dr. Low Seow Chay

Dr. Lui Ming Wah, SBS, JP

Mr. Tsang Yiu Keung, Paul

Mr. Look Andrew

COMPANY SECRETARY

Miss Chung Wing Man

AUTHORISED REPRESENTATIVES

Ms. Chong Siw Yin

Miss Chung Wing Man

AUDIT COMMITTEE

Mr. Tsang Yiu Keung, Paul

Dr. Lui Ming Wah, SBS, JP

Dr. Low Seow Chay

Mr. Look Andrew

NOMINATION COMMITTEE

Mr. Look Andrew

Dr. Low Seow Chay

Dr. Lui Ming Wah, SBS, JP

Mr. Tsang Yiu Keung, Paul

REMUNERATION COMMITTEE

Dr. Lui Ming Wah, SBS, JP

Mr. Tsang Yiu Keung, Paul

Dr. Low Seow Chay

Mr. Look Andrew

AUDITOR

PricewaterhouseCoopers

Certified Public Accountants

Registered Public Interest Entity Auditor

REGISTERED OFFICE

Cricket Square

Hutchins Drive, P.O. Box 2681

Grand Cayman, KY1-1111

Cayman Islands

PRINCIPAL PLACE OF BUSINESS IN

HONG KONG

Unit A, 8th Floor

Mai Wah Industrial Building 1-7 Wah Sing Street Kwai Chung

New Territories Hong Kong

HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE

Computershare Hong Kong Investor Services Limited

Shops 1712-1716, 17th Floor

Hopewell Centre

183 Queen's Road East

Wanchai

Hong Kong

PRINCIPAL BANKERS

China Construction Bank (Asia) Corporation Limited

Bank of China

Intesa Sanpaolo Spa

STOCK CODE

558

WEBSITE

www.lk.world

Interim Report 2022/23

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MANAGEMENT DISCUSSION AND ANALYSIS

L.K. Technology Holdings Limited

BUSINESS REVIEW

For the six months ended 30 September 2022 (the "Period under Review"), the Group recorded a revenue of HK$2,860,238,000, representing an increase of approximately 3.1% as compared to the same period last year. The profit attributable to owners of the Company was HK$271,193,000, representing a decrease of 16.3% as compared to the corresponding period last year.

T h e G r o u p ' s r e v e n u e f r o m t h e P R C m a r k e t w a s HK$2,395,488,000, representing an increase of 7.5% as compared to the same period last year.

Since 2022, China's alternative fuel vehicles have shown a good momentum of "double improvement" in both market size and development quality, and the scale of production and sales has reached a new high. According to the data provided by China Association of Automobile Manufacturers, from January to September 2022, the production and sales volume of alternative fuel vehicles saw a significant increase and reached 4.717 million and 4.567 million, respectively, representing an increase of 1.2 times and 1.1 times, respectively as compared to the same period last year. The rapid development of alternative fuel vehicles has strongly promoted the demand for die-casting machines. China's alternative fuel vehicle industry has responded enthusiastically to advanced die-casting solutions with a strong market demand. The development of alternative fuel vehicles has driven the industry trend, with alternative fuel vehicles-related large die-casting machines growing over 40%. However, due to the decline in China's exports as a result of the global economic impact and the continued weak consumption due to the recurring pandemic in the China, the market demand for plastic injection moulding machines has declined significantly and the market competition is intense.

The Group's revenue from the overseas market amounted to HK$464,750,000, representing a year-on-year decrease of 14.6%. Due to severe global inflation, the rate and pace of interest rate hikes in major economies have exceeded market expectations since 2022, reversing the extremely loose global liquidity situation since the outbreak of the epidemic, restraining the global economic recovery, and the demand for industrial equipment in major economies has declined significantly.

FINANCIAL REVIEW

During the Period under Review, the overall gross profit margin of the business of the Group was 27.5%, representing a decrease of 1.5% as compared to the same period last year, which was mainly due to high raw material prices and insufficient utilization of production capacity of plastic injection moulding machine.

S e l l i n g a n d d i s t r i b u t i o n e x p e n s e s a m o u n t e d t o HK$268,311,000, accounting for 9.4% of revenue, representing an increase of 0.9% as compared to the same period last year, mainly due to the increase in labor costs.

General and administrative expenses amounted to HK$241,116,000, accounting for 8.4% of revenue, which represent an increase of 1.1% as compared to the same period last year, mainly due to the increase in labor costs.

Net finance costs amounted to HK$18,913,000, representing an increase of 25.9% as compared to the same period last year, which was mainly due to an increase in interest expense stemming from an increase in bank loans.

PROSPECTS

China's alternative fuel vehicles are currently developing vigorously, and the scale of production and sales in 2022 has reached a new high. China's local brands continue to innovate in technology and achieve new results while developing internationally, and the vehicle exports to overseas markets increased significantly as compared to the same period last year. China's alternative fuel vehicles have entered a new stage of accelerated development, ushering in new development opportunities.

At present, the Group continues to make contributions to the innovation of the alternative fuel vehicle manufacturing process. With the rapid development of the global alternative fuel vehicle industry, the Group has strong level of orders on hand currently, and its production is intense yet orderly. Unless unforeseen circumstances arise, the Group is optimistic about the sustainable development of its business operation.

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