Valuetronics : Media Release - Valuetronics’ FY2022 results affected by severe global components shortage

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Valuetronics Holdings Limited

Unit 9-11, 7/F, Technology Park

No. 18 On Lai Street, Shatin,

New Territories, Hong Kong

Tel: (852) 2790 8278

Fax: (852) 2304 1851

www.valuetronics.com.hk

Media Release

Valuetronics' FY2022 results affected by

severe global components shortage

• The Group's newly constructed Vietnam campus in Vinh Phuc Province has commenced mass production in the last quarter of FY2022, following the successful completion of ISO and customer audits
• Proposes a Final Dividend of HK 10 cents per share1 and together with the Interim Dividend of HK 4 cents per share paid in December 2021, the aggregate dividend for FY2022 amounts to HK 14 cents per share

Singapore, 26 May 2022 - SGX Mainboard listed Valuetronics Holdings Limited ("Valuetronics", "鸿通电

子控股有限公司" or collectively with its subsidiaries, the "Group"), a premier design and manufacturing

partner for the world's leading brands in the Consumer Electronics ("CE") and Industrial and Commercial Electronics ("ICE") sectors, announced the results for its financial year ended 31 March 2022 ("FY2022") today.

Mr Ricky Tse Chong Hing ("谢创兴"), Chairman and Managing Director of Valuetronics commented:

"While the components shortage and supply chain problem could last beyond 2022 and continue to affect our profit margins, we are cautiously optimistic to remain profitable for FY2023, given our track record and strong fundamentals, which is supported by our strong balance sheet. We will continue our prudent and calibrated approach, by adopting various measures to mitigate the challenging operating

1 Subject to shareholders' approval at the upcoming Annual General Meeting.

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environment and continuing to invest in our capabilities and operational excellence initiatives for the longer term. With our Vietnam campus now operational, we are well positioned to offer existing and new global customers a regional manufacturing footprint to meet their diversified needs."

Dividend

After taking into account the Company's FY2022 results performance and the challenging business environment, the Board of the Company is recommending a Final Dividend of HK 10 cents per share for FY2022 (FY2021: HK 16 cents per share).

Together with the Interim Dividend of HK 4 cents per share paid out by the Company in December 2021, the aggregate dividend for FY2022 amounts to HK 14 cents per share (FY2021: HK 21 cents per share). The aggregate dividend amount is approximately 53.4% of the net profit attributable to shareholders for FY2022.

Financial Highlights

As previously highlighted in the Group's FY2021 annual report and FY2022 interim announcement, severe shortages of certain key electronic components have affected the Group's ability to meet orders, leading to a decline in revenue and a corresponding decrease in profit. The Group's revenue decreased by 11.1% to HK$2,027.4 million in FY2022 from HK$2,281.5 million in the financial year ended 31 March 2021 ("FY2021"), and gross profit decreased by 28.8% to HK$274.8 million (FY2021: HK$386.2 million). The Group's gross profit margin also decreased from 16.9% to 13.6%, eroded by higher component prices due to tight supply, and China's increased labour and operating costs, under an appreciating Renminbi.

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Segmental Revenue

The Group's CE segment's revenue rose by 3.8% to HK$706.9 million in FY2022 (FY2021: HK$680.7 million), mainly due to a rebound of orders from smart lighting customers. The Group's ICE revenue however, decreased by 17.5% to HK$1,320.5 million in FY2022 (FY2021: HK$1,600.8 million) due to the significant drop in sales to the Group's auto customer as switched over production from the Group's factory to another vendor in North America. Furthermore, the shortage of key electronic components also affected order fulfilment for certain ICE customers.

The Group's other income decreased by 20.0% to HK$14.7 million (FY2021: HK$18.4 million) and this was mainly due to the decrease in interest income under the low interest rate environment. Selling and distribution expenses fell by 32.4% to HK$21.6 million (FY2021: HK$32.0 million) as commission expenses decreased in line with the decline in revenue, while administration expenses decreased by 13.3% to HK$141.6 million (FY2021: HK$163.3 million) due to more stringent cost control measures put in place by management and a decrease in staff costs.

As a result of the above, net profit in FY2022 decreased by 39.3% to HK$113.5 million (FY2021: HK$187.1 million), which translates into an earnings per share of approximately HK 26.1 cents for FY2022 as compared to HK 43.0 cents for FY2021.2

Resilient Financial Position

As at 31 March 2022, the Group continues to maintain its resilient financial position with a net asset value per share (excluding treasury shares) of HK$3.2 (31 March 2021: HK$3.1)3, net current assets of HK$962.1 million (31 March 2021: HK$975.3 million), total assets of HK$2,095.7 million (31 March 2021: HK$2,241.6 million), and shareholders' equity of HK$1,368.6 million (31 March 2021: HK$1,347.1 million).

1. Basic earnings per share calculated based on a weighted average number of ordinary shares in issue (excluding treasury shares) of 435,451,270 shares for FY2022 and 435,048,782 shares for FY2021.
2. NAV per share calculated on the basis of 431,914,737 shares as at 31 March 2022 and 435,625,837 shares as at

1. March 2021.

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