Revenue Increased 6.2% to HK$422.5 million with Net Profit at HK$13.3 million – – Further Expands the Security Solution Business in Asia Pacific with the Acquisition of i-Sprint and Continues to Promote Cross-territories Business
News Release – April 28, 2011
(Hong Kong, 28 April 2011) Automated Systems Holdings Limited (“ASL” or “the Group”) (SEHK stock code: 771), a leading IT services provider in Hong Kong, announced its 2011 first quarterly results for the three months ended 31 March 2011. During the period under review, the Group’s revenue amounted to HK$422.5 million, up by 6.2% compared to the corresponding period last year. Profit before income tax for the first quarter in 2011 was HK$16.7 million (For the three months ended 31 March 2010: HK$28.8 million). Profit attributable to the equity holders of the Company in the review period was HK$13.3 million (For the three months ended 31 March 2010: HK$23.4 million). Basic earnings per share in the review period were HK 4.26 cents (For the three months ended 31 March 2010: HK 6.81 cents).
The increase for cost of sales and services due to deployment of additional resources to meet customer satisfaction for projects completion, continuous investment of additional resources to develop new business offerings for business growth and also spending on acquisition costs.
The Group continues to maintain a healthy balance sheet with net cash stood at approximately HK$316.6 million as of 31 March 2011. No debt was recorded during the period under review and the working capital ratio was 1.53:1. The Groups order book balance was approximately HK$582.7 million, an increase of HK$7.4 million compared to the corresponding period last year. New orders amounted to HK$461.1 million approximately the same as the corresponding period last year.
Simon Leung, Executive Director and Chief Operating Officer of Automated Systems Holdings Limited said, “In the review period, we have successfully won diverse and sizable projects providing a wide range of IT solutions, services and IT infrastructure to our customers. More significantly, the Group took a big step forward in expanding its presence in Asia Pacific by the acquisition of i-Sprint Innovations Pte Ltd. (“i-Sprint”). Through the full support of Beijing Teamsun Technology Co. Ltd. (“Teamsun”), our ultimate controlling shareholder and the favorable “Multi-Level Protection Scheme” policy in Mainland China which support domestically developed security solutions, we can further expand our business in Greater China and be able to provide our regional customers with broader security and higher quality of service.”
For the three months ended 31 March 2011, product sales and service revenue were HK$283.4 million and HK$139.1 million, increasing by 4.9% and 8.8% respectively against the corresponding period in 2010, and contributing 67.1% and 32.9% to the total revenue respectively. Commercial and public sector sales for the first quarter in 2011 accounted for 34.3% and 65.7% to the total revenue respectively compared to 42.5% and 57.5% from the corresponding period in 2010.
The Group has successfully accelerated its expansion in Asia Pacific by completing the acquisition of the entire equity interest of i-Sprint, a Singapore company which provides world-class credential and access management solutions. The acquisition enables the Group to immediately expand its existing operations to more countries worldwide, particularly in Asia Pacific including Singapore, Malaysia, Vietnam, Indonesia, Japan, and etc. The acquisition also strengthens the Group’s leading position in the IT security market as a strong provider of credential and access management solutions to principally cater to the high security demands of financial services industry (“FSI”) and multi-national corporations.
The acquisition of i-Sprint enriches the Group’s existing security solutions offerings which include those from Teamsun and ASL. The Group can provide 360o authentication and credential management solutions addressing the increasing demand for IT security solutions targeted towards meeting sophisticated threats, expanding regulatory compliance requirements, increased usage of remote access and new delivery models for services, such as cloud computing and software-as-a-service (SaaS). In fact, the acquisition immediately brought over 30 additional customers to the Group, which many of them maintain leading positions in Asia Pacific and operations globally.
For the first quarter in 2011, IT solutions business recorded steady performance. The Group secured a number of projects providing focused solutions ranging from security, enterprise content management to business intelligence. Prior to i-Sprint becoming a subsidiary of the Group, the Group had already been working with i-Sprint to provide enterprise-class security solutions to financial institutions in Hong Kong. The Group was awarded a project from a well-known Chinese owned bank based in Hong Kong to provide i-Sprint’s credential and access management solutions with token authentication management as well as maintenance, on-site support, consultancy and training services. Furthermore, the Group had earlier secured another credential and access management solutions project from the Hong Kong branch of one of the oldest banks in China. The project is already in progress at the time of the period under review, and demonstrates the Group’s dedication towards carrying out reliable security solutions to its customers.
Apart from security solutions, the Group sees the growing needs for enterprise content management solutions fueled by its customers’ increased desire to store, access and share information or documentation instantly. The Group scored a project from a government authority to implement a paperless meeting system for government officials to share confidential documents electronically for the purpose of increasing the efficiency of conference meetings. The Group also provided another significant enterprise content management solutions to China Southern Airlines Company Limited (“China Southern Airlines”). The Technical Document Management System (“TDMS”) was upgraded and a new system architecture and platform were built for China Southern Airlines. The upgrade, installation and relevant testing have also been recently completed. These important projects fully demonstrate the Group’s capability of seizing upon the growing needs for Green IT.
The Group also continued to focus on business intelligence solutions in the period under review. A business intelligence project was awarded by Hutchison Global Communications Limited, a leading fixed network operator in Hong Kong, to build a business intelligence reporting platform for comprehensive data analysis and efficient decision-making. The Group is devoted to replicating the success to other sectors to further business growth.
Satisfactory performance continued to be recorded in the IT infrastructure business. The Group won an IT infrastructure upgrade project from one of the world’s largest banking and financial services organisations. Another project was secured from an international airline to upgrade hardware and software applications for all of its offices in Hong Kong and Mainland China. Technology upgrades will ultimately facilitate the Group’s customers to optimise their IT infrastructure to reduce risk and support their operations.
Providing one-stop managed services, particularly to those major and long-standing customers, is another business that the Group focuses on. Service contracts for desk side and server operations were continuously awarded to the Group from the above-mentioned airline during the period under review. Outside Hong Kong, a multi-million dollar project was secured from a renowned bank in Thailand to provide managed services on IT infrastructure for its branches across 76 provinces nationwide on a multi-year basis.
The Group continues to work closely with Teamsun and has successfully been awarded with projects from customers who have operations in Mainland China. A support and maintenance services project on security infrastructure was awarded to the Group by a leading international bank for its offices covering major cities in Mainland China. In addition, the Group won a contract from China Sports Lottery HKJC Infotech (Beijing) Co., Ltd. to offer an office automation infrastructure with maintenance service. These wins have once again demonstrated the Group’s success in its cross-territories business strategy and synergies leveraged with Teamsun in the Greater China market.
Moving forward, the Group expects to explore more business opportunities in Asia Pacific by combining i-Sprint’s market-proven and global technology with ASL’s breadth of hardware, software and one-stop services, especially in the FSI market. With the expanded territorial coverage to more countries in Asia Pacific, the Group is able to bring its diverse and advanced IT products and solutions to customers across Asia Pacific , and vice versa, to help multi-national corporations enter the Greater China market through collaborating with Teamsun.
Additionally, the Group will continue to focus on managed services by strengthening its ties with customers. Apart from promoting the solutions business in the areas of security, enterprise content management and business intelligence, the Group has observed that smart phones and mobile devices are becoming popular. With the increasing demand for such devices, the business opportunities will also increase correspondingly. For this reason, the Group will focus on providing IT solutions which help customers grasp the latest trends in mobile computing.
Apart from providing customised solutions using market-available IT products, the Group will continue to study ways to monetise some of its market-proven solutions. i-Sprint’s over 10-year intellectual property (IP) creation and market-proven software development experience can facilitate the Group’s strategic plans for IP development, which will be beneficial to the long-term growth of ASL.
Mr. Leung concluded, “In the growing regional IT-security market, we are eager to become a leader in bringing diverse security solutions to regional customers. Besides, we will continue to work with Teamsun to build greater synergies for promoting the stated cross-territories business. Through the acquisition of i-Sprint, we are well-positioned to compete more effectively in Asia Pacific, bringing even higher value to our shareholders.”
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