Impro Precision: 2021 revenue up 29.2% to HK$3,777.7 million; Adjusted profit to company shareholders up 34.7% to HK$422.2 million; Dividend for the year of HK 10.1 cents per share, an annual increase of 140.5% | Taiwan News

“Global Footprint”, “Region for Region Manufacturing” and “Dual Source Production” strategies to seize opportunities in the post-pandemic era

HONG KONG SAR – Media Outreach – March 10, 2022 – Improv Precision Industries Limited (“improv “or the”Group”) (stock code: 1286), a leading global manufacturer of high-precision, high-complexity and mission-critical cast and machined components, today announced its annual results for the fiscal year ended December 31, 2021.

In 2021, the volatile epidemic situation of the novel coronavirus has cast a shadow over the recovery of the global economy. However, the Group experienced a strong recovery in certain segment end markets, such as utility vehicles, hydraulic equipment, construction machinery, agricultural equipment, boats and recreational vehicles, and sales in these end markets even surpassed the highest level in history. During the year, the Group’s turnover amounted to 3,777.7 million Hong Kong dollars, an increase of 29.2% compared to last year. The Company recorded net profit attributable to Company shareholders of HK$382.8 million and basic earnings per share of 20.3 HK cents. Adjusted profit attributable to shareholders of the Company was HK$422.2 million, up 34.7% year-on-year. The Group has decided to declare a second 2021 interim dividend of 7.2 HK cents per share. Along with the first interim dividend of 2.9 Hong Kong cents per share, the dividend for the year was 10.1 Hong Kong cents per share, an increase of 140.5% from 4 .2 Hong Kong cents per share last year.

In the automotive end markets, due to the substantial increase in demand for commercial vehicle components in North America and Europe, sales of automotive components reached 1,723.3 million. HK dollars, an increase of 23.6% year-on-year. Revenue from commercial vehicle components increased 43.6% year-on-year to HK$755.0 million. The Group has also successfully developed various new energy vehicle parts and surface treatment services for certain new energy vehicle manufacturers. New energy vehicle revenue exceeded HK$30 million, which is an annual increase of more than 3.3 times.。

During the year, the industrial and other end market also performed well. Revenue increased 39.0% year-on-year to HK$1,748.6 million, reaching an all-time high. Among which, hydraulic equipment business revenue increased 61.4% year-on-year to HK$399.9 million, mainly due to the group’s business development with new customers in the hydraulic market in the PRC last year, as well as increased demand in the United States due to increased investment in infrastructure projects initiated by the US government, resulting in strong demand for products in that end market. Sales of construction equipment and agricultural equipment benefited from the North American market and additional revenue from new models this year, thus increased significantly by 55.1% and 57.3% to reach 276.0 million respectively. HK$ and 254.0 million HK$. Driven by “staycation” and new products and opportunities in health and sports trends, boat and recreational vehicle end-market revenue grew 50.6% year-on-year to $188.1 million HK dollars. Against the backdrop of the global pandemic and power restrictions in the PRC, the market demand for distributed power motors has increased. As a result, sales of heavy-duty engines grew rapidly by 56.0% in the second half of the year, and for the full year of 2021 the growth rate was 22.2%.

The number of the Group’s newly developed aerospace SKUs in 2021 increased by 54.7% year-on-year to 215 units, reaching an all-time high. Due to the continued impact of the pandemic, international travel in the aerospace industry remained “almost stopped” in 2021, resulting in a slight increase of 5.5% in product sales revenue on the related aerospace end market compared to last year. With the gradual recovery of the aerospace enterprise market, it is expected that aerospace segment activity will likely show a stronger recovery in 2022. The medical end market benefited from the recovery in customer demand, with revenues up by 25.8% during the year.

The Group adheres to the “Global Footprint”, “Region for Region Manufacturing” and “Dual Source Production” strategies and has built the Mexico SLP campus, its North American production base in Mexico, to serve a range of end markets in South America. North. including automotive, construction equipment, agricultural equipment, heavy-duty engine, hydraulic equipment, and medical aerospace. The sand casting plant and the precision machining plant at the Mexico City SLP campus went into production in November 2021, while the construction of the other three plants, including precision casting, aerospace components and surface treatment plants, has also started, and is expected to start production in 2022. It is expected that the flexibility of the Group’s operations will be improved, as potential supply chain and pricing risks caused by geopolitics can be mitigated and the cycle of the production line can be significantly shortened, which will improve overall operational efficiency. Factory revenues in Mexico have grown from around HK$50 million to more than HK$100 million in 2021, representing an increase of almost 100%. As the Mexico SLP Campus factories gradually come into operation, the production capacity will be very high. It is estimated that factory revenues in Mexico could reach HK$300 million in 2022.

Looking ahead, despite the potential problems caused by the Omicron variant, blockages and entry restrictions have been lifted in various countries as the vaccination rate around the world surges. International travel activities are expected to gradually resume in 2022, and aerospace end-market activity could become the Group’s future growth engine. At the same time, the Group’s industrial end-market activity still has enormous growth potential. In particular, bills related to the improvement of local infrastructure projects were passed to the United States. Demand for construction equipment and utility vehicles, as well as hydraulic equipment associated with construction equipment, will explode, which should drive the growth of the Group’s business in the United States. the industrial end market. Seizing various opportunities ahead, the Group was well placed to seize opportunities. As of February 28, 2022, the Group’s total outstanding orders to be fulfilled over the next twelve months amounted to HK$3,748 million, representing a year-on-year increase of 42.9%, or an increase of 18.4% relative to total share orders to be filled in the next 12 months to July 31, 2021.

Mr. Lu Ruibo, CEO of Impro, said: “Driven by the increase in demand, as well as the slowdown in the rise in the prices of certain raw materials, the agreement reached with major customers at the end of 2021 to adjust product prices, and the optimization of to improve operations efficiency, a gradual improvement in the Group’s profit margin in the future is anticipated. At the same time, the Group will continue to strengthen its research and development capabilities while expanding its production capacity to provide its customers with more diversified and personalized products and services. Building on its global production base and expanding capacity, the Group will consolidate and expand its global customer base, seize business opportunities arising from the recovery of market demand after the pandemic, and strive to reach sustainable earnings growth to create better returns for its long-term Shareholders.”

About Impro Precision Industries Limited (stock code: 1286)

Impro Precision Industries Limited was established in Wuxi, China in 1998 and its head office was relocated to Hong Kong, China in 2011. It is one of the world’s top ten manufacturers of high quality castings and machined parts. precision, high complexity and mission critical. diversified end markets. According to the Roland Berger report, Impro Precision was the world’s seventh largest independent investment casting manufacturer and the largest investment casting manufacturer in China, as well as the world’s fourth largest precision machining company in the end markets of automotive, aerospace and hydraulics, each in terms of total sales in 2018. The Group is also one of the few national suppliers to offer complete solutions, including research and development initial, tooling design and manufacture, casting, heat treatment, secondary machining and surface treatment. Impro Precision has established a worldwide manufacturing layout and a comprehensive service network. It has 19 production sites in China, Germany, Turkey, Czech Republic and Mexico, which are supported by nine sales offices in China, USA, Luxembourg, Turkey, Germany, Mexico and Hong Kong, as well as warehousing capacity in China, North America, Luxembourg, Mexico, Germany and Turkey. Impro Precision has established long-term strategic cooperative relationships with a number of globally recognized industry leaders, selling its products to more than 30 countries and regions.

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