Revenue Increases 15.3% to HK$487.2 Million with Net Profit Reaches HK$13.4 Million — Continues to Capture the Business Opportunities in Cloud Computing and Data Center Markets — Explores Fast-growing Regional Security Market
News Release – April 27, 2012
(Hong Kong, 27 April 2012) – Automated Systems Holdings Limited (“ASL” or “the Group”) (SEHK stock code: 771), a leading IT services provider in Hong Kong, announced its first quarterly results for the three months ended 31 March 2012 (the “Review Period”).
During the Review Period, the revenue of the Group was HK$487.2 million, higher by 15.3% compared to the same period last year (For the three months ended 31 March 2011: HK$422.5 million). Although the Group is exposed to the impact of an increase in overall cost, for the three months ended 31 March 2012, gross profit margin and profit attributable to equity holders of the Company maintained a similar level to the same period last year, representing 11.4% and an increase of 1.2% to HK$13.4 million respectively (For the three months ended 31 March 2011: gross profit margin and profit attributable to equity holders of the Company was 11.7% and HK$13.3 million respectively). Basic earnings per share during the Review Period were 4.32 HK cents (For the three months ended 31 March 2011: 4.26 HK cents).
The Group maintained a healthy balance sheet and no debt was recorded during the Review Period. As of 31 March 2012, the Group’s net cash stood at approximately HK$263.6 million with a working capital ratio of 1.56:1. During the three months ended 31 March 2012, orders newly secured by the Group amounted to approximately HK$543.1 million, representing an increase of 18.1% as compared with the corresponding period in 2011. As of 31 March 2012, the order book balance was approximately HK$766.4 million, an increase of HK$52.7 million compared to 31 December 2011.
Mr. Henry Hui, Chief Executive Officer of ASL said, “We are pleased that the Group recorded a growth of 15.3% in revenue during the first quarter of this year, and achieved progress in all the businesses. We now provide our customers with a range of IT solutions, services and IT infrastructure, fully demonstrates our ability of providing one-stop IT services. Besides, we have promptly received several important projects in the previous year, with focus on providing managed security services and running the Security Operations Center (“SOC”) in our Hong Kong headquarters. In line with our development, the SOC was officially launched in April 2012. Since then, we are able to provide regional customers with round-the-clock and internationally-recognized managed services, helping enterprises protect their IT systems against threats.”
For the three months ended 31 March 2012, the product sales and service revenue were HK$308.3 million and HK$178.9 million, increasing by 8.7% and 28.7% respectively compared with the corresponding period last year. Product sales and service revenue contributed 63.3% and 36.7% to total revenue respectively. For the three months ended 31 March 2012, commercial and public sector sales contributed 44.1% and 55.9% to total revenue respectively, compared to 34.3% and 65.7% for the corresponding period in 2011.
The Group’s IT solutions business continued to achieve results. Its security solutions achieved stable progress amongst the numerous IT solutions in the market. During the Review Period, customers using the services of the Group’s SOC included government departments, banking and financial institutions and a major multi-modal public transport service provider in Singapore. The commencement of the SOC indicates that the Group will invest more resources to provide one-stop IT security services, including security infrastructure, security assessment, security audit, training, consulting, implementation, maintenance and onsite supporting services.
The Group obtained two important orders in relation to providing IT security monitoring services from a financial institution and a government department handling financial affairs, respectively. Furthermore, the Group succeeded in further expanding its overseas market. In March 2012, the Group was successful in signing a contract with a member of a Singapore-based brokerage group in Thailand, a group with business coverage across 13 countries, to provide i-Sprint Innovations Pte. Ltd. (“i-Sprint”)’s security products to ensure that customers can safely access their internal systems and are compliant with audit requirements. These successful examples have not only signified the Group’s expansionary strategy by leveraging i-Sprint’s intellectual property products to obtain desired results continuously, but also demonstrated our rich domain knowledge and ability to serve the needs of the security intensive financial sector. As a matter of fact, the expansion of the Group’s security business has depended on its large pool of talent from the security field. In March 2012, one of the Group’s security experts was accredited with Certified Information Security Manager (CISM) Geographic Excellence Award by Information Systems Audit and Control Association (ISACA), a non-profit global information systems certification organization. The said expert obtained the highest score in the Asian region CISM examination which was held in December 2011. This grand award not only praises its security expert, but is also recognition of its efforts in providing quality customer services over the years.
The Group has continued with its existing strategies in capturing the trends in the cloud computing market. Projects won by the Group in the previous year were either completed or well underway during the Review Period. Moreover, the Group is in active discussion with its key customers on the expansion plans of those cloud computing projects that are under implementation.
Besides, the Group has expanded its scope of business by focusing on its key and long-term customers. With the increasing demand for data centers, the Group was successful in gaining traction where relevant IT service needs are concerned, in particular the demand for managed services, such as providing outsourced IT infrastructure, systems, human resources and facility management. The Group signed a number of service contracts, including the supply, implementation and maintenance of the operations support systems for a newly-opened data center of a financial institution whom it had been serving for many years. This new-generation data center has extremely high standards of security requirements and management benchmarks. The award of such contract demonstrated that the Group has earned the trust of the customer as concerns its ability to offer internationally-recognized managed services.
The Group has won other similar contracts, including the installation of computer equipment at a Hong Kong data center for a customer in Macau. The managed services have also achieved remarkable performance in overseas. The Group has also won a project for the provision of onsite supporting services from a leading global shipping company in Thailand.
During the Review Period, the Group was able to seize relevant business opportunities to achieve good performance in its IT infrastructure business, because public and private organizations have a need to update and enhance their services. It is worth mentioning that the Group won a multi-million dollar project for upgrading the firewall of a local communications operator to enable it to cope with the increasing number of 3G service users. In February this year, the Group won an Oracle systems integration project in the tens of millions of dollars from an IT distributor ranking first in Asia Pacific and third in the world. The Group has been offering services to this customer in both mainland China and Taiwan since 2008, signifying the strength of the Group in providing quality regional services.
Moving forward, considering that the sovereign debt issue in Europe and the fiscal problems in the US will likely need to be fully resolved over an extended period of time, the Group will pay close attention to various challenges faced by the global and local economy in the medium term. Actively seizing various business opportunities in IT solutions is one of the Group’s business strategies. We will continue to capture the trends in cloud computing in public and private sectors. The Group will leverage its strength in providing end-to-end cloud solutions, such as infrastructure supply, applications development, systems integration and managing the customer’s servers, security, database and storage while offering cloud computing services to a greater number of customers by replicating the success of earlier cases. According to the Policy Address 2011-2012, the Hong Kong Government has indicated that it will encourage local industry to develop advanced cloud computing technologies and applications. The Government will construct an official cloud computing platform and procure public cloud computing services in the next few years. In this regard, the Group will strive to seize relevant business opportunities by building a private cloud and public cloud for the Government and providing relevant IT infrastructure and services.
Besides, the Group will continue to focus on exploring profitable security markets within the region. With the growth in popularity of cloud computing services, the increasing emphasis on mobility in corporate IT environments and the need for industries, in particular the financial industry, to comply with regulatory requirements, the demand for security is on the rise. The official launch of the Group’s SOC and the leading position of i-Sprint have raised the Group’s advantages, allowing it to capture growing security needs.
Furthermore, given that data centers may promote the development of applications as well as cloud computing services, in addition to the new policies announced by the Hong Kong Government for encouraging the development of data centers in Hong Kong, the Group believes that there is potential for greater growth in demand for data centers. The Group is capable of managing new-generation data centers and providing complex IT infrastructure, enabling it to capture business opportunities.
Mr. Hui concluded, “We will strive to capture more regional business opportunities, cooperate closely with Teamsun and consolidate linkages with our business partners for the expansion of the Group’s business. We will invest more resources in our talent pool to provide better customer services, while continuing to implement stringent cost-effective measures to capitalize on potential opportunities in a more effective way. Through the clear directions set out above for our future developments, we are fully confident that ASL will further enhance its leading position in the market.”
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