Plastec Technologies Reports Fiscal 2017 Financial Results; Declares Final 2017 Cash Dividend of $1.50 Per Share

HONG KONG--()--Plastec Technologies, Ltd. - (OTCBB:PLTYF), (the “Company”), today reported audited financial results for the fiscal 2017 year ended December 31, 2017. See financial tables at the end of this release in Hong Kong dollars (HKD). All other amounts in this press release are presented in U.S. dollars (USD) with conversion rates of US$1.0: HK$7.8 and US$1.0: RMB6.3, respectively.

2016 Sale of Assets

The Company’s financial results reflect the closing of the October 11, 2016 Share Transfer Agreement (“Agreement”) with Shanghai Yongli Belting Co., Ltd. (“SYB”) and its wholly-owned subsidiary, Shanghai Yongjing Investment Management Co., Ltd. As a result, the Company no longer owns Plastec International Holdings Limited (“Plastec”) or its integrated plastic manufacturing operations, all being disposed of to SYB.

Since closing of the divestiture transaction, the Company, as a holding company, has been focused on:

  • completing the construction of its manufacturing plant in Kai Ping, China, which is at the final stage and intended to be disposed of to SYB in the near future prior to its official operation at a price equivalent to the capital used for its construction, subject to terms and specifics to be agreed and finalized upon by the parties concerned;
  • collecting rental income from certain property it owns and that is being leased to one of Plastec’s subsidiaries;
  • collecting any payments it may receive upon Plastec achieving the performance target for the year ended December 31, 2018 of HK195,408,000, or USD $25,052,308; and
  • exploring any investment opportunities arising.

Impact of Sale of Assets on the Company’s Latest Financial Statements

The disposal of Plastec represents a strategic shift and has a major effect on the Company’s results of operations. Accordingly, assets and liabilities, revenues and expenses, and cash flows related to the disposed business lines have been reclassified as discontinued operations in the consolidated financial statements for the years ended December 31, 2017, 2016 and 2015. The consolidated balance sheets as of December 31, 2015, the consolidated statements of operations and comprehensive income and the consolidated statements of cash flows for the years ended December 31, 2016 and 2015 have been adjusted retrospectively to reflect this strategic shift.

Confirmation of Plastec’s Achievement of Performance Target for the Year Ended December 31, 2017

SYB has confirmed and acknowledged that Plastec’s audited net profit (on a consolidated basis, after deducting noncurrent gains and losses) for the year ended December 31, 2017 was HK$183,124,000, which is in excess of the performance target for the year ended December 31, 2017, set at HK$177,088,000 in the Agreement, by HK$6,036,000, or approximately 3.4%.

Accordingly, the Company shall be paid a further sum of RMB124,380,000, or approximately $19,742,857, in due course and in accordance with the terms of the Agreement.

Current Balance Sheet Highlights

  • $71.7 million in working capital at December 31, 2017, compared to $78.3 million at December 31, 2016.
  • Book value per share was $7.62 at December 31, 2017, compared to $7.75 at December 31, 2016.

Declaration of Final 2017 Cash Dividend to Shareholders

The Company also announced today that its Board of Directors has declared a final 2017 cash dividend for the fiscal year ended December 31, 2017 of US$1.50 per ordinary share. The dividend will be payable on or about April 19, 2018 to shareholders of record as of April 12, 2018.

Including this final cash dividend for the fiscal year ended December 31, 2017, the Company has distributed approximately US$12.80 per ordinary share in dividends in aggregate as a measure of rewarding shareholders for their continued support since 2014.

Management Comments

Mr. Kin Sun Sze-To, Chairman of the Company, stated, “We continue to evaluate potential opportunities to leverage our strong capital position while also rewarding our shareholders as we unwind the legacy business. We are pleased to announce a final 2017 cash dividend for fiscal 2017, which is well justified by the achievement of the performance target by the disposed line of business for the same period.”

Forward Looking Statements

This press release contains “forward-looking statements.” These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Actual results may differ from expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements.

 
PLASTEC TECHNOLOGIES, LTD.
 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

 

   

Year ended
December 31,

 

Year ended
December 31,

 

Year ended
December 31,

2015     2016     2017  
HK$ HK$ HK$
 
Revenues - - -
 
Operating (expenses)/income, net
Selling, general and administrative expenses (27,812 ) (18,946 ) (19,593 )
Other income 25,161 23,874 16,413
Gain on disposal of property, plant and equipment -     545     -  
Total operating (expenses)/income, net (2,651 )   5,473     (3,180 )
 
Income/(loss) from operations (2,651 ) 5,473 (3,180 )
 
Interest income 1,028     1,276     2,258  
Income/(loss) before income tax expense (1,623 ) 6,749 (922 )
 
Income tax expense from continuing operations (294 )   (1,241 )   (524 )
Net income/(loss) from continuing operations
attributable to the Company’s shareholders (1,917 )   5,508     (1,446 )
 
Discontinued operations:
Net income from discontinued operations (including gain of HK$141,341 (2016:HK$540,921) upon the disposal) 163,204 717,721 141,341
Income tax expenses from discontinued operations (29,952 )   (31,187 )   -  
 
Net income from discontinued operations attributable to the Company’s shareholders 133,252     686,534     141,341  
 
Net income attributable to the Company’s shareholders 131,335 692,042 139,895
 
Other comprehensive income:
Foreign currency translation adjustment (2,538 )   (13,490 )   (813 )
Comprehensive income attributable to the Company’s shareholders 128,797     678,552     139,082  
 
Net income per share:
 
Weighted average number of ordinary shares
Continuing operations 12,938,128 12,938,128 12,938,128
Discontinued operations 12,938,128     12,938,128     12,938,128  
 
Weighted average number of diluted ordinary shares
Continuing operations 12,938,128 12,938,128 12,938,128
Discontinued operations 12,938,128     12,938,128     12,938,128  
 
Basic income per share attributable from
Continuing operations (HK$0.15) HK$0.44 (HK$0.11)
Discontinued operations HK$10.35     HK$53.06     HK$10.92  
 
Diluted income per share attributable from
Continuing operations (HK$0.15) HK$0.44 (HK$0.11)
Discontinued operations HK$10.35     HK$53.06     HK$10.92  
 
 
PLASTEC TECHNOLOGIES, LTD.
 
CONSOLIDATED BALANCE SHEETS
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
         
December 31, December 31,
2016   2017
HK$ HK$
 

ASSETS

 
Current assets    
Cash and cash equivalents 486,222 395,087
Deposits, prepayment and other receivables 4,833 33,574
Consideration receivable 131,686     141,341  
Total current assets

622,741

570,002

 
Property, plant and equipment, net 153,782 194,712
Prepaid lease payments, net 16,638 15,111
Intangible assets 438     438  

Total assets

 

793,599     780,263  
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 
Current liabilities
Other payables and accruals 6,138 4,690
Tax payable 5,837     6,243  
Total current liabilities 11,975 10,933
     
Total liabilities 11,975     10,933  
 
Commitments and contingencies - -
 
Shareholders’ equity

Ordinary shares (U.S.$0.001 par value; 100,000,000 authorized, 12,938,128 and 12,938,128 shares issued and outstanding as of December 31, 2016 and 2017, respectively)

101

101

Additional paid-in capital 26,049 26,049
Accumulated other comprehensive income (5,891 ) (6,704 )
Retained earnings 761,365     749,884  
Total shareholders’ equity 781,624     769,330  
 
Total liabilities and shareholders’ equity 793,599     780,263  
 
     

PLASTEC TECHNOLOGIES, LTD.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

 

Year ended
December 31,

Year ended
December 31,

Year ended
December 31,

2015   2016   2017
HK$ HK$ HK$
 
Operating activities
Net income 131,335 692,042 139,895
Less: Net income from discontinued operations (133,252)   (686,534)   (141,341)
Net income/(loss) from continuing operations (1,917) 5,508 (1,446)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 8,366 8,772 8,791
Net gain on disposal of property, plant and equipment - (545) -
Changes in operating assets and liabilities:
Deposits, prepayment and other receivables (3,451) (144) (28,017)
Other payables and accruals 6,430 (19,802) (1,425)
Tax payables 639 1,664 408
Subsidiaries (636)   -   -
Net cash provided by/(used in) continuing operations 9,431 (4,547) (21,689)
Net cash provided by discontinued operations 232,256   196,478   -
Net cash provided by/(used in) operating activities 241,687   191,931   (21,689)
 
Investing activities
Purchase of property, plant and equipment (23,809) - (48,943)
Proceeds from disposal of property, plant and equipment - 545 -
Sale proceeds from disposal of a subsidiary (net of cash disposed of HK$314,079 for the year 2016) -   703,363   131,686
Net cash (used in)/provided by continuing operations (23,809) 703,908 82,743
Net cash provided by/(used in) discontinued operations (126,628)   (28,059)   -
Net cash (used in)/provided by investing activities (150,437)   675,849   82,743
 
Financing activity
Dividends paid 22,899   (837,614)   (151,376)
Net cash provided by/(used in) continuing operations 22,899 (837,614) (151,376)
Net cash used in discontinued operations (164,777)   (5,815)   -
Net cash used in financing activities (141,878)   (843,429)   (151,376)
 
Net increase/(decrease) in cash and cash equivalents (50,628) 24,351 (90,322)
 
Effect of exchange rate changes on cash and cash equivalents (2,538) (13,490) (813)
Cash and cash equivalents, beginning of year 528,527   475,361   486,222
Cash and cash equivalents, end of year 475,361 486,222 395,087
Less: cash and cash equivalents from discontinued operations (163,696)   -   -
Cash and cash equivalents, end of year from continuing operations 311,665   486,222   395,087
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest (income)/paid, net 1,207 731 (2,258)
Income taxes paid/(refund) 345   (424)   116
 
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:
Consideration receivable -   131,686   141,341

Contacts

Plastec Technologies, Ltd.
HL Ning
Chief Financial Officer
ning@plastec.com.hk
or
INVESTOR RELATIONS:
The Equity Group Inc.
Adam Prior, 212-836-9606
Senior Vice President
aprior@equityny.com
or
In China
Katherine Yao, +86 10 6587 6435
Senior Associate
kyao@equityny.com

Contacts

Plastec Technologies, Ltd.
HL Ning
Chief Financial Officer
ning@plastec.com.hk
or
INVESTOR RELATIONS:
The Equity Group Inc.
Adam Prior, 212-836-9606
Senior Vice President
aprior@equityny.com
or
In China
Katherine Yao, +86 10 6587 6435
Senior Associate
kyao@equityny.com