Symbol

EVA HOLDINGS(00838) Company Profile

		Company Profile
	Stock Name	EVA Precision Ind
	Listing Date	2005-05-11
	Sector	Industrials
	Chairman	ZHANG Hwo Jie
	Par Value	0.1
	Total Issued Capital	1.730B
	Market Cap	1.246B
	Principal Activities EVA is a vertically-integrated precision metal and plastic mould and component manufacturing service provider. The Group's existing services include mainly i) design and fabrication of precision metal stamping and plastic injection moulds; ii) manufacturing of precision metal stamping and plastic injection components by using tailor-made metal stamping and plastic injection moulds; iii) lathing of metal components; and iv) assembly of precision metal and plastic components manufactured by the Group into semi-finished products and finished products through automated technologies such as laser welding. At present, the businesses of the Group cover mainly office automation equipment and automotive components. Latest Results The Group's profit attributable to shareholders for the year ended 31-12-2024 amounted to HKD 243.5 million, an increase of 2.7% compared with previous corresponding period. Basic earnings per share was HKD 0.1399. A dividend of HKD 0.02 per share was declared. Turnover amounted to HKD 6.30 billion, an increase of 1.8% over the same period last year, gross profit margin up 1.0% to 21.8%. (Announcement Date: 28 Mar 2025) Business Review - For the year ended December 31, 2024 Office automation equipment Based on over three decades of foundation in the OA equipment sector, extensive industry experience and excellent product quality, the Group continued to win customers’favour for its products and managed to consolidate its foothold amidst geopolitical tensions. Recently, the consumption pattern in the Chinese market has changed, with consumers preferring products with competitive prices. Nevertheless, the Group’s OA equipment business, which focuses mainly on manufacturing high-end OA products, remained stable. This is primarily because the Group has continued to work closely with long-term customers and strived to promote cooperation projects with new customers. The overall turnover of OA equipment increased by 1.1% year-on-year to HK$4,341,834,000 (2023: HK$4,295,475,000), mainly attributable to the increase in sales of the Group’s two major OA customers, namely, Fujifilm and Kyocera upon the completion of destocking in the industry. Total sales of these two major OA customers grew by 2.4% year-on-year, driving an increase in orders from Shenzhen and Vietnam, which in turn led to an increase in turnover in the two locations. In Vietnam, as the peak production season of the OA equipment industry commences in the second half of the year, the Group adjusted its production lines at the industrial park in Haiphong, Vietnam in the first half of 2024 to prepare for mass production in the second half. Unfortunately, Typhoon Yagi hit northern Vietnam in September and the Group’s industrial park in Haiphong and its customers and supply chains in northern Vietnam suffered typhoon damage, resulting in operational disruptions. As a result, production of certain Vietnam orders was relocated to southern China and some were delayed, narrowing the business growth in Vietnam in the second half of the year. Nevertheless, Vietnam still recorded an increase of 11.5% in annual sales. The Group’s industrial park in Haiphong, Vietnam and the leased factories in the surrounding region will soon reach peak capacity. In order to adequately meet customer demand, the Group has obtained a leasehold land in Quang Ninh Province in 2023 and started construction of a new industrial park in 2024. The new industrial park’s land area is approximately 60,000 square meters, 1.6 times the size of the existing Haiphong industrial park, and is expected to be completed and operational in early 2026.The Group will flexibly adjust the completion schedule of the new industrial park on a regular basis based on the expansion plans and order forecasts of customers. The Group believes that its business will continue to benefit from the shift of orders to the south, as it will take advantage of low labour costs and policy incentives in Vietnam to serve customers in Europe and the US, drive the growth of the OA equipment business and improve profitability. The Group expects Vietnam to be a key growth driver for the entire OA equipment business in the medium and long term and is optimistic about its development in the next few years. In Shenzhen, turnover increased by 3.6%, mainly due to increased orders from Kyocera and Fujifilm.The typhoon that hit northern Vietnam back in September also resulted in the relocation of certain projects to Shenzhen for production. As a leader in the OA equipment industry, the Group continued to maintain its cooperative relationships with long-term customers in 2024, hoping to expand the transaction scale of plastic parts, sheet metal parts, shafts and other mechanical parts. The Group’s continuous efforts to deepen cooperation with customers and increase investment in product research and development (“R&D”) in recent years also helped maintain sales of OA equipment to Japanese brand customers. The industrial park in Weihai’s Double Islands Bay remained as the D-EMS service base of the Group’s OA equipment business. The base provides customers with one-stop, vertically integrated services–“D-EMS Services”–ranging from mould design to complete machine assembly. Weihai is also the main base for the Group’s domestic sales of OA equipment, and Fujifilm and Hewlett-Packard are its two key customers. However, in the recent year, China’s economy has been slow to recover from the downturn and consumption has been weak. End-user consumption patterns have also changed and consumers are becoming more price-conscious in their purchasing decisions. In addition, the government’s economic stimulus policies have had a limited impact on consumer sentiment. Given these factors, domestic sales was stagnant in 2024, resulting in a 12.2% decline in overall sales in Weihai. During the year, the OA equipment business segment recorded a profit of HK$333,282,000 (2023:HK$337,365,000) and a segment profit margin of 7.7% (2023: 7.9%). Despite the Group’s implementation of effective cost control measures since last year, the Group still recorded a modest decline in the segmental profit margin. This is because the segment recognised a one-off gain in 2023 from the write- back of provisions arising from previous acquisitions, and another one-off gain related to the termination of the lease of a production base, while in 2024 the segment had no such gains. Nevertheless, the Group continued to reduce the proportion of lower-margin products and enhance the overall added value of its product portfolio. The quality of customer orders also continued to improve, resulting in a strong improvement in gross profit performance. At the same time, the management focused on promoting internal reforms and adopted measures to address market changes, such as effective lean production and strengthened cost control. In addition, the Group continued to streamline its organisational structure, improve labour efficiency, and enhance inventory management to promote improvement in overall gross profit margin. Going forward, the Group will rise to the challenge, strive to stabilise the OA equipment business, develop and launch more relevant and practical products and solutions. Thus, we believe this business segment still has huge room for development. Automotive components In the unpredictable global automotive industry, despite the continuous expansion of the electric vehicle (“EV”) sector, the production of traditional fuel vehicles still dominates most of the market.This is especially the case in the US and European markets, where the growth of new energy vehicles (“NEV”) lags behind that of China, with traditional fuel vehicles still holding a significant market share. In 2024, the entire automotive market faced macroeconomic challenges such as inflation, rising interest rates, economic recession in Europe, and supply chain issues, which, together with the rapid expansion of Chinese NEV brands into global markets, fierce price wars, cut-throat competition within the industry, and successive layoffs by many car manufacturers worldwide, posed immense challenges to the automotive component industry. During the year, the Group’s automotive component segment continued to grow, and with the joint efforts of the segment’s sales and production teams, turnover of the automotive component business increased by 3.6% to HK$1,955,092,000 for the full year (2023:HK$1,887,183,000).In the ever-changing automotive market environment, the Group closely monitors market needs and customer dynamics, continuously integrates various resources, and optimises and upgrades products and services. The Group has continuously increased its investment in technology R&D and market expansion in the field of NEV. This has not only facilitated the rapid growth of the Group’s strategic customer base for NEV, but has also attracted numerous new orders for the Group’s automotive component segment. In 2024, the Group’s automotive component segment’s new orders had gradually been put into production, prompting the total sales of the segment’s two major customers, Faurecia and Great Wall Motors, to increase by approximately 18.9% and 24.4%, respectively. Production capacity of the industrial parks in Wuhan and Mexico was gradually increased, thus driving double-digit turnover growth at both of the industrial parks. In response to the trend toward automotive lightweighting, the Group’s automotive component segment planned to introduce hot stamping production lines in order to enhance the overall competitive advantage of its products and lay a strong foundation for future business growth. The Wuhan industrial park recorded double-digit sales growth in 2024, with a year-on-year increase of 11.1%, mainly due to the steady increase in the production scale of the Great Wall Motor project and the phased achievements made in developing new markets. Amidst the domestic economic downturn and inadequate domestic demand, the Wuhan industrial park has successfully entered the supplier systems of multiple NEV customers at home and abroad, including Stellantis, which started bulk sales in 2024. During the year, the Wuhan industrial park also successfully secured orders of over HK$200 million from Stellantis for the production of moulds and components. These moulds and products will be exported to the US and European markets and are expected to gradually contribute to our sales over the next three years. At the same time, the Wuhan industrial park also continued to deepen cooperation with major domestic automotive customers, and participated in the development of seat frame assemblies. It also made breakthroughs in cooperation with emerging customers in the domestic smart EV sector, which is expected to significantly increase the turnover of the industrial park. Looking ahead, the Wuhan industrial park will continue to deepen internal management reforms and increase investment in new technologies, providing a robust foundation for product upgrades and market positioning. The industrial park has now completed the build-up of technical and talent reserves for welding assembly services of various products such as seats and chassis, laying a solid foundation for the future growth of high-quality orders. In Mexico, the Group has seen initial results from the internal management reform of the automotive industrial park and has gradually established a localised team of professionals. The Group is focusing on developing its advantages as a market leader by leveraging localised talent and processes in Mexico.Despite the ongoing challenges of geopolitical uncertainties and tariff risks, the Group’s sales in Mexico recorded a year-on-year growth of 13.5%, driven by the increase in production resulting from the commissioning of new projects with long-term customers such as Faurecia. With the support of advantageous resources and advanced technology, the Group has gradually strengthened its management team in Mexico and established a team of top-notch talents in the country, thereby enhancing the stability of the team and the localisation of management processes. In the second half of 2024, the Group focused on continuous cost reduction and efficiency improvement, process optimisation, and quality and profit improvement. The newly invested 1250T and 2500T presses significantly increased production capacities during the year to meet the increase in customer orders. In 2024, following the Wuhan industrial park, the industrial park in Mexico was also successfully included in Stellantis’supplier system. It secured and fulfilled its first batch of orders during the year, marking a phased breakthrough in the welding assembly business, thus significantly enhancing the added value of the products. In 2025, the Group will continue to do its utmost to acquire new orders, strive to diversify its customer base, and gradually expand its service scope and market coverage. The industrial park in Shenzhen, although small in area, is the Group’s central production base for automobile seat moulds. The quality of the seat moulds has been consistently recognised by customers over the years, and the product mould business accounts for approximately 60% of the business in Shenzhen. The product moulds developed and produced in Shenzhen are primarily exported to the US and European markets. However, due to the impact of the economic downturn in Europe and geopolitical risks, the turnover in 2024 fell by approximately 7.8% year-on-year. However, exports recovered in the second half of the year, narrowing the decline in the first half. At the same time, benefiting from the Group’s stronger market development, orders on hand for moulds and products in Shenzhen reached an all-time high in 2024, including those from Adient’s mould and component project in Japan, enabling the Group to successfully enter the Japanese automotive components market, which is expected to drive rapid growth in the next five years. In Zhongshan, the Group’s previous strategy focused on Japanese customers. However, over the past two years, the continued decline in the production of Japanese brand vehicles in China, especially Honda, Toyota and Nissan, has resulted in sluggish sales, hence turnover from the Group’s Japanese customers in Zhongshan, including Aisin, Yachiyo and Faurecia, also declined accordingly. During the year, turnover from Zhongshan fell by 5.8%. Although shipments improved slightly in the second half, it was insufficient to reverse the overall decline for the year. During the year, the Group’s Zhongshan business shifted its focus to developing major customers such as an in-vehicle electronics customer, Brose and Faurecia, and also secured several NEV customers, actively diversifying and expanding its customer base to reduce the risk of individual market performance impacting the factory in Zhongshan, while also exploring the domestic in-vehicle electronics business and the export of automotive components to Europe. At the same time, the Group continued to implement measures to reduce costs and increase efficiency in Zhongshan to enhance the Group’s competitiveness. In 2024, the Chongqing industrial park encountered challenges brought about by changes in the market environment in the first half of the year, leading to a decline in sales of some domestic automotive manufacturers’old car models. In the second half of the year, the Group made strategic adjustments to its sales tactics and proactively reduced orders for less profitable components and taking early action to respond to the intense competition and fierce price wars in the domestic automotive market, as well as the growing preference for mid-to-low-end car models among domestic consumers. Despite these efforts, Chongqing’s annual turnover fell by 7.8%. As a core engine driving the economic development in central and western China, the Chongqing industrial park introduced advanced intelligent production equipment from around the world, allowing it to focus on providing customers in the southwest region with comprehensive services including joint development of auto body parts and supply of functional components for auto body assembly. At the same time, the Group further deepened its strategic partnership with Chongqing’s core customers–high-quality automotive manufacturers such as Great Wall Motors, Changan Automobile, and SGMW, significantly expanding the intensity and scope of cooperation, which greatly promoted the realisation of its business objectives in Chongqing. The Group was deeply involved in the development and reaffirmed its commitment to seven popular NEV model projects of Changan Automobile, Great Wall Motors, Deepal and Avatr Chongqing, and commenced phased mass production in the second half of 2024, which will gradually be reflected in the sales performance and set a new milestone for the turnover of the Chongqing industrial park. During the year, utilisation rates at the Group’s industrial parks in Wuhan and Mexico were increased.At the same time, the Group gradually reduced low-margin product items in its existing customer base to improve the overall added value of its products. The quality of customer orders continued to improve. As a result, the overall gross profit of the automotive component business increased. However, the performance of the Mexico operation was greatly affected by exchange rate fluctuations in the Mexican peso. In 2023, the majority of the net exchange gains recorded by the Group were derived from the appreciation of the Mexican peso against the US dollar, while in 2024, the Group recorded a net exchange loss due to the weakening of the Mexican peso. Therefore, the Group’s segment profit for automotive components in 2024 was HK $89,824,000 (2023: HK $108,727,000) and the segment profit margin declined to 4.6% (2023: 5.8%) Business Outlook - For the year ended December 31, 2024 Looking ahead to 2025, the market will be extremely volatile. Global inflation indicators will be subject to many uncertainties and the number of interest rate cuts will not exceed expectations. This, coupled with geopolitical turmoil, global tax reforms, and extreme weather, will create an environment full of challenges and mounting operating pressures. The markets for OA equipment and automotive components in which the Group operates are also undergoing constant change, including the integration of procurement and production among certain OA equipment customers, namely Ricoh and Toshiba, and Fujifilm and Konica Minolta, which presents considerable development opportunities for the Group as a leader in the OA equipment market. In addition, with the integration of large domestic automakers, Dongfeng and Changan Automobile, the Group, as their automotive components supplier, has actively engaged in docking. Given the core technologies and talent it has accumulated over the years in the automotive component manufacturing sector, the Group is confident in the potential of the segment. In addition to changes in market stakeholders, OA equipment has also undergone macro changes in the China market. Affected by the economic downturn, various domestic stimulus policies have failed to achieve their objectives, consumption patterns and habits of domestic consumers have also changed.The mid-to-low end office and home printers seem to be more popular with modern users. Following this trend, high-end Japanese OA equipment customers are gradually reducing production in China, affecting the Group’s investment in Weihai. However, since the industrial park in Haiphong, Vietnam that the Group invested in eight years ago is now operating smoothly, and the Group has also made forward-looking strategic deployments in the previous year to begin the construction of the new plant in Quang Ninh Province, Vietnam, the Group has reaped the benefits fully. Thus, the Group still maintains a stable cooperative relationship with its Japanese OA equipment customers and is transferring the planned production expansion in Weihai to Vietnam. This move is expected to offset the decline in domestic orders in the coming year. At the same time, the Group is also actively exploring new opportunities in the domestic market, increasing its investment in the D-EMS complete machine manufacturing projects. It is expected that the Group’s first self-designed, developed, mass-produced and assembled complete product will commence mass production in 2025, mainly targeting the Chinese market where printers are gradually being manufactured locally. The Group will face the challenges with a cautiously optimistic attitude.While adhering to its strong infrastructure and core advantages, the Group has also implemented in-depth internal procedural reforms and optimisation measures. We actively advocate and practice the concept of lean production, and we are fully committed to the transformation and upgrading of automation and digitalisation. The Group has also begun to seek sustainable development solutions to address current changes, and the pursuit of resilient business growth has become its primary development focus. Over the past year, the Group has implemented a series of measures, including maintaining a balance between debt reduction and business development, reviewing the profitability and sustainability of customer projects, and actively standardising the supervision of suppliers. The Group believes that by promoting sustainable development, it can continuously improve its business performance, demonstrate the high quality of its business, and reveal its value in the future, so as to formulate detailed plans for its long-term development and operation. While the economic environment may face many uncertainties in the next few years, the Group remains confident about expanding the OA equipment market. With the advent of the era of AI and big data, the demand for data centers has grown substantially, and high-quality, high-performance, highly reliable servers have become a key element and are essential to promoting digital transformation. As a result, the demand for such servers will continue to increase.With a global production layout, a strong R&D team, high-quality manufacturing resources, and an efficient supply chain network, and based on the foundation of its core stamping and automated processing technologies and its laser welding techniques, the Group is actively developing the Internet and information business. The Group has started to provide services such as the development, production and assembly of moulds for server control boxes and server case components to renowned Internet customers, setting the stage for future business expansion, diversification and sustainable development.Currently, the Group’s server mould development and production base is located in Shenzhen, which allows the Group to take advantage of the abundant resources and production capacity of its Shenzhen Industrial Park, and also prepares for the gradual relocation of the OA equipment business to Southeast Asia in the coming years. At present, the Group has developed 15 server-related projects, 13 of which are in production. On the other hand, the global automotive industrial market is in turmoil. In the international market, the pace of NEV development varies. In the China market, the government stopped subsidising the purchase of NEV in 2023, which triggered a price war for products and fierce competition in the industry. Fortunately, the Group’s strategic layout in Mexico five years ago has enabled it to maintain its competitiveness and global development advantages in an unpredictable market environment. Although 2024 was full of challenges in various aspects, the global NEV market is still in a stage of rapid development, and demand continues to increase. The Group’s automotive component business has achieved steady growth under a strong strategic layout and continuous investment in innovation.The China Association of Automobile Manufacturers pointed out that China’s automobile market will maintain a steady and positive development trend in 2025. Sales volume is expected to have an increase of around 4.7% year-on-year. Among them, NEV sales are expected to be up 24.4% year-on-year. The penetration rate is expected to increase continuously, and the market will also continue to expand.These factors, in addition to the strong demand for China’s NEVs in overseas markets, are conducive to the growth of the Group’s automotive component business.The market expects that the automobile industry will continue to face multiple challenges in 2025, such as weak domestic demand, fierce internal competition, sluggish consumer confidence, political turmoil, increasing pressure from the external environment, as well as low market concentration and fierce competition in the automotive components manufacturing market. However, the basic demand for automobiles is expected to grow continuously despite the changes in the domestic and international environment. The Group will maintain its dual focus on the development of OA equipment and automotive manufacturing technology to counter unpredictable market risks. We will seek to consolidate our leading position in the market to achieve sustained business growth and strive for the best returns for shareholders. Source: EVA Precision Ind (00838) Annual Results Announcement

	Related Stocks