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Public company info - Apex Ace Holding Limited , 06036.HK
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Apex Ace Holding Limited, 06036.HK - Company Profile
Chairman Lee Bing Kwong
Share Issued (share) 1,010,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Industrial Goods
Corporate Profile Business Summary: The principal activities of the group is sales and integration of semiconductors, electronic components and storage systems. Performance for the year: Revenue decreased by 9.3% to HK$1,756.0 million (Year 2019: HK$1,936.8 million) Net loss attributable to the owners of the Company for Year 2020 was HK$5.1 million (Year 2019: net loss of HK$17.0 million) Basic loss per share for Year 2020 was 0.51 HK cent (Year 2019: loss per share 1.70 HK cents) Business Review: Digital Storage Products The Group’s Digital Storage products include DRAM, FLASH and MCP memory products, which are widely applied to multimedia and mobile devices such as set-top boxes, smart TVs, wearable devices, mobile phones, etc. These products also include optical and mass storage products, which are mainly used in enterprise-level storage and server systems. During the Year, revenue generated from this product segment decreased by 15.8% to HK$1,173.7 million (Year 2019: HK$1,393.7 million), mainly due to a combination of a decrease in volume of products sold and the competitive pricing environment. However, gross profit of the segment increased to HK$66.2 million (Year 2019: HK$57.5 million), up by 15.1% when compared with the same period last year. Gross profit margin increased to 5.6% (Year 2019: 4.1%), mainly attributable to a higher percentage of revenue derived from sales of certain digital storage products for consumer electronics delivering relatively better gross profit margin. General Components General Components include switches, connectors, passive components, main chips, sensors, power semiconductors and analog-to-digital converters, which are mainly designed for use in mobile and multimedia devices. The Group achieved healthy revenue growth in this segment during the Year. Revenue from this segment increased by 7.2% year-on-year, increasing from HK$543.2 million in Year 2019 to HK$582.3 million in the Year. However, the prices of most general components fell, narrowing gross profit of this segment by 24.4% to HK$72.9 million (Year 2019: HK$96.3 million). Gross profit margin fell to 12.5% (Year 2019: 17.7%). Prospects: Looking ahead, the demand for semiconductors will continue to grow robustly in the near future due to a combination of post-pandemic recovery and the industry’s wave of increasing chip inventories. As the US is putting more Chinese technology companies on its blacklist, more domestic players are following the example of a Chinese technology giant to add more chips to their inventories in case of any unexpected changes. The overall market demand is expected to further improve throughout 2021 on the back of economic recovery from the COVID-19 pandemic, although this increase is partly offset by the declines of some consumer electronic products. With social distancing measures in place, demand for home entertainment such as gaming devices and audio equipment is on the rise. People have been turning to online gaming platforms as a replacement for public spaces and these consumer electronics are becoming a vital source of social interaction. In addition to the technology heavyweights who have been active in the gaming market, a few other major brands have stepped into the competitive gaming ring, hoping to gain a share in the gaming market. The list of consumer electronics vendors is expected to grow and the demand for processors, NAND flash and DRAM component underpinning consumer electronic products will extend beyond 2020. Likewise, demand for automotive semiconductors is continuing to rise due to greater complexity in car designs. Global automotive manufacturers are keen to introduce innovative sensors, mapping applications, and other new technologies along with the expansion of electric vehicles (EVs). Semiconductors are in particularly high demand because of the pandemic-driven popularity of consumer electronic devices. This was complemented by a forecast-beating uptick in demand for new cars in the last quarter of 2020. The shortage of automobile chips, meanwhile, is continuing, and with a rise in chip prices the situation is expected to continue well into 2021. The PRC has positioned “new infrastructure” construction as a key policy pillar of its postpandemic economic recovery. The country will develop next-generation information networks and expand 5G applications while more charging facilities will be built to promote wider use of new energy vehicles. There are over 700,000 base stations across the PRC, making for one of the largest coverage areas in the world. It is believed that more than 6 million base stations are needed to cover the entire country. The government-led stimulus initiative is likely to not only boost consumption, but also enhance the sustainability of growth. Investment in new infrastructure will bring a new round of market opportunities for electronic products. The pandemic is driving changes in consumer and corporate practices around the world. While some companies are delaying planned hardware upgrades and other long-term migration projects in the face of the economic downturn, people are significantly increasing their online activity, including e-commerce, working-from-home and online learning. Trends such as workforce flexibility are likely to drive demands for laptop and tablet as well as additional data center capacity requirements. Demand for enterprise IT and enterprise cloud solutions is also expected to remain stable. Within industrial applications, the major demand drivers for semiconductors including investments in medical electronics and power and energy products are expected to propel demand in the coming months as manufacturing activities begin returning to normal levels with operations almost in full swing. In view of the aforementioned industry trends, the Group will continue its diversification strategy and take measures to expand its business in the telecommunications, automotive and consumer electronics end-market. Leveraging the acquisition of distributorship rights completed during the Year, it will serve its customers with a wider product portfolio in the rapidly changing and advancing electronic component distribution market. The Group will also implement more stringent financial management so as to support greater growth. To that end, it will align its overall cost structure, capital investments and other expenditures with its expected revenue, development plans and market conditions. In view of the underlying credit risk arising from heightened economic uncertainty due to the COVID-19 outbreak, the Group will strengthen its credit control in the coming year. To conclude, the Group remains cautiously optimistic about market developments as it has worked to maximise the potential of its product portfolio and operating model. The Group believes that its growing portfolio addresses emerging and disruptive automotive, industrial and cloud-based applications and will position itself as a future leader in the microelectronics industry. Against the backdrop of global economic uncertainties, the Group will continue to diversify its product portfolio and customer base so as to defend against economic headwinds and industrial challenges and enhance its competitiveness to stride forward in a prosperous manner.

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