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ISP Holdings Limited, 02340.HK - Company Profile
Chairman	Kingston Chu Chun Ho
Share Issued (share)	425,000,000
Par Currency	Hong Kong Dollar
Par Value	0.1
Industry	Construction & Decoration
Corporate Profile	Business Summary: The principal business of the Group is principally engaged in the provision of property and facility management (“PFM”) business and interiors and special projects (“ISP”) business in Hong Kong, China and Macau. Performance for the year: The Group saw the best results since 2016 in terms of profit attributable to Shareholders of approximately HK$37.6 million this Reporting Year. The operating profit saw a remarkable increase from approximately HK$22.8 million in 2018 to approximately HK$43.6 million for the Reporting Year, representing 91.2% increment. Property and Facility Management Business Property and Facility Management Synergis has successfully sustained the growth of PFM business in 2019 and remained one of the market leaders with over four decades of extensive experience. The Group maintains a diverse portfolio for a wide spectrum of clients including government, corporate clients, public institutions and private clients. The scope of service includes but not limited to government departments, large-scale public facilities, transportation systems, airport cargo terminals, education institutions, hospitals, commercial and industrial properties, shopping malls, public housing estates, private housing and car parks, etc. Hong Kong Leveraging the Group's rich management experience, exceptional talents and leading-edge innovative technology, the Group is capable of providing the most appropriate “one-stop-shop” solutions to the Group's clients and earning their trust. During the Reporting Year, the Group was awarded over 30 new contracts with a total contract sum of over HK$300 million. Among those, the following three significant new contracts with a total contract sum of approximately HK$250 million were from the Group's longterm business partners, The Link and the MTR Corporation Limited (“MTR”): -Property Management Support Services (“PMSS”) for Shopping Centres, Car Parks & Cooked-Food Stalls (Tin Shui Wai & Tuen Mun); -PMSS for Shopping Centres, Car Parks & Cooked-Food Stalls (Kowloon Central, Sham Shui Po, Homantin & Tsz Wan Shan); and -Provision of Term Concierge Personnel for Elements The intake of about 50 Link’s shopping centres and an A-grade MTR shopping mall increased the Group's scope and coverage of the market. The Group's business portfolio also leaped into a new milestone remarkably. Subsequent to the Reporting Year, the Group was awarded several 3-year contracts of provision of Fitter Services Term Maintenance for The Link’s shopping centres, car parks, markets and cooked-food stalls. With those newly awarded contracts, the Group became one of the largest property and facility services providers of The Link’s retail facilities and car park portfolio. Another significant contract awarded following the Reporting Year was a 3-year contract of provision of property management services to the Independent Commission Against Corruption Building. Together with other minor contracts awarded after year end, the Group has altogether been new contracts with total contract sum of over HK$100 million. During the Reporting Year, the Group has deployed its expertise and experience to progressively expand the Group's car park business. The Group has launched a new brand “Synergis Parking” in late 2019 to increase the Group's brand awareness in the car park industry. The Group was awarded four new car park contracts resulting in the increase of the Group's parking spaces by over 400 in 2019. Subsequent to the Reporting Year, the Group was further awarded a 3-year car park management contract for three car parks, namely Western Garden, Mount Verdant and Terrace Concerto of the Hong Kong Housing Society. At present, the Group is managing over 20,000 car parking spaces throughout Hong Kong. These include the car park spaces in West Kowloon Station of High Speed Rail’s Hong Kong Section and The Link’s car park projects in New Territories East and New Territories West. The Group has gained recognition from the public, proven by the new contracts awarded during the year and achievement of over 90% of contract retention rate with an increase of service fee. In spite of the economic downturn and ongoing public order events in the latter half of 2019, the Group's revenue has still increased by 7.8% to approximately HK$591.5 million and the operating profit has increased by 19.5% to approximately HK$31.9 million for the Reporting Year as compared with last year. With the steady growth in revenue and the effect of cost reduction after improved operating efficiency, the results in 2019 was encouraging. The Group succeeded in reducing the operating expenses substantially by 18.9% to approximately HK$30.4 million. The Group is able to maintain its competitiveness in the market with quality services offered to the Group's clients. The Group strives hard to expand the Group's business under keen competitive environment and exercise appropriate cost control measures to sustain the Group's profit margin. With the Group's stable and unique market position, the Group will continue to retain the Group's current portfolio whilst exploring opportunities in commercial and operational facilities in the territory. In 2020, the Group will continue to sustain the business and carry on the stringent cost control practice to combat challenges under the uncertain economic situation. China In 2019, the Group's China business had turned around with the effective resource relocation strategy implemented in the year before. The team has successfully obtained a 3-year asset management services contract (including business positioning, technical support consultancy, leasing and operation management) for Jinan Traffic Centre which is a commercial complex developed by Jinan Sijian Construction Group, a famous developer in Shandong Province. Located in the heart of Tianqiao District of Jinan City, Jinan Traffic Centre project is a commercial development with 340,000 square metres comprising top-grade office, residential buildings, shopping centre and deluxe hotel. The project works was commenced in August 2019. Stepping into 2020, in view of keen competition and market saturation in first-tier cities, the team will further explore opportunities in second-tier cities like Jinan and Chengdu. After initiating consultancy work for Jinan Traffic Centre project, significant future income will be expected to generate in next two years in view of good relationship with clients. Besides, the team has started business in Chengdu following the award of a business positioning contract for a new shopping mall from a famous developer in Chengdu in late February 2020. With strong commitment from the management team, the Group is confident to improve the profitability of the Group's China PFM business in near future. Ancillary Business Synergis has developed the Ancillary Business over the years to offer comprehensive value-added services, including integrated procurement, laundry, cleaning, security, maintenance and technical support services, to the Group's clients. Despite these businesses have always been in a supportive role to the Group's core PFM business, the Ancillary Business have brought themselves to grow with their market potential, proven with the dazzling result this year. Ancillary Business recorded a steady growth with an increase of revenue by 11.5% to approximately HK$130.3 million and also an increase of gross profit by 8.8% to approximately HK$23.6 million as compared to that of last year. With the effort putting into improve the operating efficiency in result of 13.8% of overheads saving from last year, a huge jump of operating profit from approximately HK$4.9 million last year to approximately HK$9.2 million was achieved. The result was satisfactory and encouraging. All in all, the Ancillary Business has well developed and contributed over 20% of the operating profit of PFM Business this Reporting Year, especially the credit putting to the Group's cleaning business. It revealed the advancement of service provision and active expansion of various business portfolios with strong commitment of the new management team. Being the major revenue contributor to Ancillary Business segment, the cleaning business has obtained around 30 new contracts with a total contract sum of over HK$30 million in 2019. the Group's cleaning business has further enlarged its client base in public and private estates, residential, industrial and commercial buildings, education institutions, shopping malls, hotels and service apartments. Major contracts in 2019 include: -Serviced apartments: Mori Mori and The Unit -High-end/ luxury residential properties: Hong Lok Yuen and Fair Way Garden -Residential estates: Ching Wah Court and Tsz On Court Block B On Hong Court -Newly completed residential properties: The Carmel -Commercial properties: Tower 125 and Tung Che Commercial Centre, both under the Tung Wah Group of Hospitals -Education institutions: Pentecostal Yu Leung Fat Primary School, Yaumati Kaifong Association School, and Hong Kong Baptist University Senior Staff Quarters The Group saw great development potential of the Ancillary Business and will expand the business progressively. The business team will keep on expanding its client base and look forward to offering more comprehensive supporting services to its clients. Interiors and Special Projects Business As another key business arm of Synergis, ISP Business provides one-stop ISP services including planning, design, consultancy, project management, new build and alteration and addition works, repair and restoration of historic buildings work, curtain wall, sourcing services, etc. to its local and overseas customers. During the Reporting Year, the total revenue and operating profit of ISP Business recorded approximately HK$838.1 million and approximately HK$10.0 million respectively. The revenue was approximate to that of 2018 with 12.4% increment in operating profit. The management of ISP Business took a cautious approach last year to monitor operating expenses and such effective cost control measure has uplifted the operating profit although minor reduction on gross profit was recorded. Despite the increasing competitive environment of the industry, the total outstanding workload for contracts on hand as of 31 December 2019 was approximately HK$680.0 million. During the year, the Group was awarded several new major contracts with a total contract sum of approximately HK$300 million. The key projects include: -Cognita Annex Works at 25 Man Fuk Road in Homantin; -Main Contract for Renovation Works at Fung Tak Market in Diamond Hill; -Proposed Alteration and Addition Works at Kam Tai Shopping Centre in Ma On Shan; -ATL Warehouse Floor Lobbies Renovation Package 3 (Phase 2); and -Relayout Works at some shops in Telford Plaza II, Kowloon Bay Affected by ongoing public order events, Hong Kong’s property market has weakened since the latter half 2019. Construction projects and property sales have slowed down as developers and investors took a more prudent business approach. At the same time, the local operating environment, in particular retail and hotel operations, has weakened. All these have inevitably affected the Group's ISP business.The Group continues to strive for the growth of the ISP Business through staying focus on the key development sectors including fitting-out, alteration and addition, renovation, etc. With the team’s commitment to excellence, the Group is looking for an improvement of the Group's overall business performance in the near future. Prospects: Looking forward, the Group expects the local economy remains challenging, with lingering public order events and the coronavirus outbreak. The Group's business, especially ISP, which is heavily dependent on retail and hospitality market condition, will be inevitably affected. Facing near-term headwinds from economic uncertainties, the Group shall capture the opportunity of the steady local residential property sector and strive to maintain a continuous business growth. On a Group-wide overview, the Group considers that the overall financial performance of the Group remains sound. Aligning the Group's values of customer focus, integrity, teamwork, innovation and pursuit of excellence, sustainability is the Group's core business strategy. The Group is committed to enhancing customer satisfaction through better communication with clients and improvement to the Group's services. Besides, with the rapid change of business environment, the Group will continue to manage various operational and financial risks and take appropriate measures to minimise and combat these risks. Leveraging its solid foundation and committed management team, the Group has full confidence in overcoming all the difficulties ahead of us.

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