Plastec Technologies Reports Fiscal 2018 Financial Results; Achievement of 2018 Performance Target

HONG KONG–(BUSINESS WIRE)–Plastec Technologies, Ltd. – (OTCBB:PLTYF), (the “Company”),
today reported audited financial results for the fiscal 2018 year ended
December 31, 2018. 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 a conversion rate of US$1.0: HK$7.8

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 any shareholding in Plastec
International Holdings Limited (“Plastec”) or its integrated plastic
manufacturing operations, all of which were 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 it completed and transferred the ownership interests in
    the subsidiaries holding the plant to Plastec on April 20, 2018;
  • collecting rental income from certain property it owns and that is
    being leased to one of Plastec’s subsidiaries;
  • collecting earnouts upon Plastec achieving the performance targets for
    the fiscal years ended December 31, 2016 through 2018; and
  • exploring any investment opportunities.

Impact of Sale of Assets on the Company’s Latest Financial Statements
The
disposals of Plastec and former subsidiaries holding ownership interests
in the manufacturing plant in Kai Ping, China represented a strategic
shift and had 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, 2018, 2017 and 2016. The consolidated balance
sheets as of December 31, 2017, the consolidated statements of
operations and comprehensive income and the consolidated statements of
cash flows for the years ended December 31, 2016 and 2017 have been
adjusted retrospectively to reflect this strategic shift.

Current Balance Sheet Highlights

  • $54.9 million in working capital at December 31, 2018, compared to
    $71.7 million at December 31, 2017.
  • Book value per share was $5.45 at December 31, 2018, compared to $7.62
    at December 31, 2017.

Management Comments
Mr. Kin Sun Sze-To, Chairman of the
Company, stated, “During the year we completed the construction and
disposal of the manufacturing plant, and have completely unwound the
Company’s requirements for our legacy business. We continue to maintain
our public listing as the Company evaluates potential opportunities to
leverage our strong capital position.”

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,

2016     2017     2018
HK$ HK$ HK$
 
Revenues
 
Operating (expenses)/income, net
Selling, general and administrative expenses (18,472) (16,489) (5,351)
Other income 23,874 16,413 16,754
Gain on disposal of property, plant and equipment 545        
Total operating (expenses)/income, net 5,947     (76)     11,403
 
Income/(loss) from operations 5,947 (76) 11,403
 
Interest income 1,236     2,213     3,082
Income before income tax expense 7,183 2,137 14,485
 
Income tax expense from continuing operations (1,123)     (524)     (2,435)
Net income from continuing operations attributable to the
Company’s shareholders
6,060     1,613     12,050
 
Discontinued operations:
Net income from discontinued operations (including gain of
HK$171,809 (2017: HK$141,341, 2016: HK$540,921) upon the disposal)
717,287 138,282 165,924
Income tax expenses from discontinued operations (31,305)        
 
Net income from discontinued operations attributable to the
Company’s shareholders
685,982     138,282     165,924
 
Net income attributable to the Company’s shareholders 692,042 139,895 177,974
 
Other comprehensive income:
Continuing operations (32)
Discontinued operations (13,458)     (813)     6,674
(13,490)     (813)     6,674
Comprehensive income attributable to the Company’s shareholders 678,552     139,082     184,648
 
 
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$0.47     HK$0.12     HK$0.93
Discontinued operations HK$53.02     HK$10.69     HK$12.82
     
Diluted income per share attributable from        
Continuing operations HK$0.47     HK$0.12     HK$0.93
Discontinued operations HK$53.02     HK$10.69     HK$12.82
 
         
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,
2017     2018
HK$ HK$
 
ASSETS
 
Current assets
Cash and cash equivalents 300,588 272,820
Deposits, prepayment and other receivables 3,230 3,339
Consideration receivable 141,341 165,506
Current assets from discontinued operations 124,843    
Total current assets 570,002 441,665
 
Property, plant and equipment, net 114,209 107,752
Prepaid lease payments, net 15,111 13,584
Intangible assets 438 438
Non-current assets from discontinued operations 80,503    
Total assets 780,263     563,439
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
Current liabilities
Other payables and accruals 4,431 4,452
Tax payable 6,243 8,678
Current liabilities from discontinued operations 259    
Total current liabilities 10,933 13,130
       
Total liabilities 10,933     13,130
 
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, 2017 and 2018, respectively)
101 101
Additional paid-in capital 26,049 26,049
Accumulated other comprehensive income (6,704) (30)
Retained earnings 749,884     524,189
Total shareholders’ equity 769,330     550,309
 
Total liabilities and shareholders’ equity 780,263     563,439
 
             
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,

2016     2017     2018
HK$ HK$ HK$
 
Operating activities
Net income 692,042 139,895 177,974
Less: Net income from discontinued operations (685,982) (138,282) (165,924)
Net income from continuing operations 6,060 1,613 12,050
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 8,376 8,176 7,984
Net gain on disposal of property, plant and equipment (545)
Changes in operating assets and liabilities:
Deposits, prepayment and other receivables 1,236 (435) (309)
Other payables and accruals (19,803) (1,658) 19
Tax payables 1,547     524     2,435
Net cash provided by/(used in) continuing operations (3,129) 8,220 22,179
Net cash provided by/(used in) discontinued operations 195,060     (29,909)     3,304
Net cash provided by/(used in) operating activities 191,931     (21,689)     25,483
 
Investing activities
Proceeds from disposal of property, plant and equipment 545
Net cash inflow from disposal of subsidiaries (net of cash disposed
of HK$49,666 for the year 2018, HK$314,079 for the year 2016)
703,363     131,686     350,655
Net cash provided by continuing operations 703,908 131,686 350,655
Net cash used in discontinued operations (28,059)     (48,943)     (101,410)
Net cash provided by investing activities 675,849     82,743     249,245
 
Financing activity
Dividends paid (837,614)     (151,376)     (403,669)
Net cash used in continuing operations (837,614) (151,376) (403,669)
Net cash used in discontinued operations (5,815)        
Net cash used in financing activities (843,429)     (151,376)     (403,669)
 
Net increase/(decrease) in cash and cash equivalents 24,351 (90,322) (128,941)
 
Effect of exchange rate changes (13,490) (813) 6,674
Cash and cash equivalents, beginning of year 475,361     486,222     395,087
Cash and cash equivalents, end of year 486,222 395,087 272,820
Less: cash and cash equivalents from discontinued operations (335,419)     (94,499)    
Cash and cash equivalents, end of year from continuing operations 150,803     300,588     272,820
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest income 1,236 2,213 3,082
Income taxes paid/(refund)        
 
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:
Consideration receivable 131,686     141,341     165,506
 

Contacts

Plastec Technologies, Ltd.
HL Ning, Chief Financial Officer
ning@plastec.com.hk

INVESTOR RELATIONS:
The Equity Group Inc.
Adam Prior,
Senior Vice President
(212) 836-9606
aprior@equityny.com

In China
Katherine Yao, Senior Associate
+86 10 6587 6435
kyao@equityny.com