Willas-Array Electronics (Holdings) Limited — Interim / Quarterly Report 2020

Nov 14, 2019

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Singapore Exchange Securities Trading Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this announcement.

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WILLAS-ARRAY ELECTRONICS (HOLDINGS) LIMITED 威雅利電子(集團)有限公司

(Incorporated in Bermuda with limited liability)

(Hong Kong stock code: 854) (Singapore stock code: BDR)

OVERSEAS REGULATORY ANNOUNCEMENT

This overseas regulatory announcement is issued pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Please refer to the following pages for the document which has been published by Willas-Array Electronics (Holdings) Limited (the “Company”) on the website of Singapore Exchange Securities Trading Limited on November 14, 2019.

For and on behalf of

Willas-Array Electronics (Holdings) Limited

Leung Chun Wah

Chairman and Executive Director

Hong Kong, November 14, 2019

As at the date of this announcement, the Board comprises four Executive Directors, namely Leung Chun Wah (Chairman), Kwok Chan Cheung (Deputy Chairman), Hon Kar Chun (Managing Director) and Leung Hon Shing; and three Independent Non-executive Directors, namely Jovenal R. Santiago, Wong Kwan Seng, Robert and Iu Po Chan, Eugene.

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FOR IMMEDIATE RELEASE

Willas-Array records sales of HK$1,672.4 million in 1H FY2020

• Except for Automotive, which achieved a 4.9% growth, all other segments registered weaker performance due to intense price competition and poor export market conditions caused by ongoing US-China trade tensions.

	Except for Automotive which achieved a 49% growth all other segments registered weaker	Except for Automotive which achieved a 49% growth all other segments registered weaker	Except for Automotive which achieved a 49% growth all other segments registered weaker	Except for Automotive which achieved a 49% growth all other segments registered weaker	Except for Automotive which achieved a 49% growth all other segments registered weaker
	, . ,performance due to intense price competition and poor export market conditions caused byongoing US-China trade tensions.nancial Highlights in HK$’m6 months ended 30 September1H FY20201H FY2019**% Change **evenue1,672.42,154.8(22.4)
Fi	nancial Highlights in HK$’m	6 months ended 30 September
		1H FY2020	1H FY2019	**% Change **
R	evenue	1,672.4	2,154.8	(22.4)
G	rossprofit	99.2	207.2	(52.1)
(Lth	oss) profit attributable to owners ofe Company:	(55.8)	6.7	NM
Bce	asic (loss) earnings per share (HKnts)*	(65.51)	7.97	NM
NAV per share (HK cents)+	AV per share (HK cents)+	687.38(as at 30 Sep	787.05(as at 31 Mar	(12.7)
		2019)	2019)

* Basic (loss) earnings per share was computed based on 85,207,049 and 84,418,355 weighted average number of shares in 1H FY2020 and 1H FY2019 respectively.

+ NAV was computed based on 85,207,049 ordinary shares.

SINGAPORE – 14 November 2019 – Willas-Array Electronics (Holdings) Limited ( “Willas-Array”

or the “Group” ), one of the largest Hong Kong-based distributors of electronics components in the Greater China region, will continue to invest more resources into its Industrial, Home Appliance and Automotive segments, which it believes will be key drivers of future growth for the Group.

For the six months ended 30 September 2019 (“ 1H FY2020 ”), WAE registered a loss of HK$55.8 million on the back of revenue, which declined 22.4% year-on-year (“ YOY ”) to HK$1,672.4 million. Except for its Automotive segment, which achieved a sales growth of 4.9% YOY, all other business segments had weaker showings mainly due to intense competition and poor export and domestic market conditions in China, which brought on by the ongoing US-China trade dispute. The challenging conditions were further compounded by the depreciation of Renminbi, which reduced the buying power of Willas-Array’s customers and forced the Group to offer more competitive pricing. With no sign of near-term improvement in the geo-political arena, many of the Group’s customers had projects that were either postponed or cancelled as sentiments turned ultra-cautious.

Willas-Array Electronics (Holdings) Limited 1H FY2020 Results Announcement Page 2 of 3

In terms of segmental breakdown, the Industrial segment, which covers a wide range of applications from switch mode power supply to energy saving products, remained the largest revenue contributor and generated HK$455.9 million in 1H FY2020 (HK$555.9 million in 1H FY2019).

Driven by domestic demand and the increasing use of the inverter function in white goods, the performance of the Group’s Home Appliance segment held steady, declining a marginal 0.5% to HK$304.8 million in 1H FY2020, amidst tough market conditions.

The Automotive segment continued to generate healthy sales for Willas-Array, with revenue increasing 4.9% YOY to HK$247.8 million in 1H FY2020. Despite the slowdown in China’s domestic car sales, car makers continued to invest in enhancing the electronic content of their cars, which had presented many opportunities for the Group to offer its engineering capabilities.

Willas-Array’s Chairman, Mr Lawrence Leung, said : “In spite of the difficult operating environment, Willas-Array is confident in being able to weather this storm as we have always been prudent in managing our costs and inventory and sustaining a healthy liquidity position. We will continue to strategically focus on our three biggest growth segments, namely Industrial, Home Appliance and Automotive, while pursuing opportunities across all our segments in order to secure more business and drive revenue growth.”

The Group’s net asset value per share came in at 687.38 HK cents as at 30 September 2019 as compared to 787.05 HK cents as at 31 March 2019.

As at 30 September 2019, the Group had a working capital of HK$313.3 million, which included a cash balance of HK$231.5 million, compared to a working capital of HK$398.9 million, which included a cash balance of HK$297.5 million as at 31 March 2019. The YOY decrease in cash was mainly due to the net effect of cash outflows of HK$3.2 million in investing activities and HK$195.7 million in financing activities and inflow of HK$135.7 million generated from operating activities. Net gearing ratio improved to 105.6% as at 30 September 2019 (31 March 2019: 108.1%) mainly due to a decrease in trust receipt loans and bank borrowings.

Mr Leung said: “Willas-Array has established a strong network of suppliers and customers in our core China market over the years. I believe our track record, long standing business relationships and our reputation for offering highly relevant engineering solutions and support to our partners, are advantages that will hold us in good stead for many years to come.”

Willas-Array Electronics (Holdings) Limited 1H FY2020 Results Announcement Page 3 of 3

About Willas-Array Electronics (Holdings) Limited

Established in the early 1980s, and listed on the Main Board of Singapore Exchange Securities Trading Limited in 2001 (SGX: BDR) and also on the Main Board of The Stock Exchange of Hong Kong Limited in 2013 (SEHK: 854), Hong Kong-based Willas-Array Electronics (Holdings) Limited (“Willas-Array” and together with its subsidiaries, the “Group”) is principally engaged in the distribution of electronic components for use in the industrial, audio and video, telecommunications, home appliance, lighting, electronic manufacturing services and automotive segments, as well as the provision of engineering solutions.

Backed by long-standing relationships with over 20 internationally reputable principal suppliers, Willas-Array carries a wide product mix, distributing and marketing over 10,000 product items which cater to over 3,000 customers. Its main markets are in mainland China, Hong Kong and Taiwan.

The Group’s reputation is well-established among suppliers, customers and banks, many of whom are its long-term partners. Its sound management policies have ensured healthy inventory and cash flow levels. The Group was generally able to achieve healthy financial results and has strong profit track record period.

In mainland China, Willas-Array has established a network of offices strategically located in Beijing, Chengdu, Chongqing, Guangzhou, Qingdao, Shanghai, Shenzhen, Xiamen and Zhongshan. It has a wholly-owned subsidiary, in the Free Trade Zone in Shanghai, which serves as a logistics centre for the Group in northern China. Willas-Array also has a wholly-owned subsidiary in Taipei to tap on the growing number of large electronic manufacturers in Taiwan doing business in China.

For more information, please contact: August Consulting Pte Ltd Wrisney Tan, wrisneytan@august.com.sg Avril Lim, avrillim@august.com.sg Tel: +65 6733 8873