Plastec Technologies Reports 2017 First Half Financial Results; Announces Extension of Securities Repurchase Plan

HONG KONG--()--Plastec Technologies, Ltd. - (OTCBB:PLTYF), (the “Company”), today reported unaudited financial results for the fiscal 2017 six-month period ended June 30, 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 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 Plastec International Holdings Limited (“Plastec”) or its integrated plastic manufacturing operations, all being disposed of to SYB.

The Company, as a holding company, is now focused on:

  • completing the construction of its manufacturing plant in Kai Ping, China which is intended to be disposed of to SYB prior to its official operation at a price equivalent to the capital used for its construction, subject to terms and specifics to be agreed upon by the parties concerned in due course;
  • 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 targets for the years ended December 31, 2017 and 2018 as described in the Agreement; and
  • exploring other investment opportunities.

Current Balance Sheet Highlights

  • $56.3 million in working capital at June 30, 2017, compared to $78.3 million at December 31, 2016.
  • Book value per share was $6.23 at June 30, 2017, compared to $7.75 at December 31, 2016.

Update on Securities Repurchase Plan

The Company announced today that its Board of Directors has approved a further extension of its existing securities repurchase plan (as expanded) through September 25, 2018, allowing it to purchase up to $5 million of its securities in both open market and privately negotiated transactions at the discretion of the Company’s management and as market conditions allow; which repurchase plan may be suspended, modified or discontinued without any notice at any time.

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 were pleased to pay a special dividend during the period, which was generated from the achievement of performance targets by the disposed line of business for the year ended December 31, 2016.”

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 (Unaudited)

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

 
  For the 6-month

period ended June 30,

2017   2016
HK$   HK$
 
Revenues - -
 
Operating (expenses)/income, net
Selling, general and administrative expenses (9,484 ) (8,827 )
Other income 7,562 13,390
Gain on disposal of property, plant and equipment -     15  
Total operating (expenses)/income, net (1,922 )   4,578  
 
(Loss)/income from operations (1,922 ) 4,578
 
Interest income 1,194     489  
(Loss)/income before income tax expense (728 ) 5,067
 
Income tax (expense)/credit from continuing operations (384 )   330  

Net (loss)/income from continuing operations

  attributable to the Company’s shareholders

(1,112 ) 5,397
 
Discontinued operations:
Net income from discontinued operations - 120,340
Income tax expenses from discontinued operations -     (16,254 )
 

Net income from discontinued operations

  attributable to the Company’s shareholders

-     104,086  
 

Net (loss)/income attributable to the Company’s

  shareholders

(1,112 ) 109,483
 
Other comprehensive income
Foreign currency translation adjustment (811 )   (9,255 )

Comprehensive (loss)/income attributable to

  the Company’s shareholders

(1,923

)

 

100,228

 
 
Net income per share:
 
Weighted average number of ordinary shares
Continuing operations 12,938,128 12,938,128
Discontinued operations -     12,938,128  
 
Weighted average number of diluted ordinary shares
Continuing operations 12,938,128 12,938,128
Discontinued operations -     12,938,128  
 
Basic (loss)/income per share attributable from
Continuing operations (0.09 ) 0.42
Discontinued operations -     8.04  
 
Diluted (loss)/income per share attributable from
Continuing operations (0.09 ) 0.42
Discontinued operations -     8.04  
 
 

PLASTEC TECHNOLOGIES, LTD.

 

CONSOLIDATED BALANCE SHEETS

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

 
 

(Unaudited)

 

June 30,

 

(Audited)

 

December 31,

2017

 

2016

HK$

HK$

 

ASSETS

 

Current assets

Cash and cash equivalents

441,995

486,222

Deposits, prepayment and other receivables

8,850

4,833

Consideration receivable

-

 

131,686

 

Total current assets

450,845

622,741

Property, plant and equipment, net

172,740

153,782

Prepaid lease payments, net

15,875

16,638

Intangible assets

438

 

438

 

Total assets

639,898

 

793,599

 
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 
Current liabilities
Other payables and accruals 5,469 6,138
Tax payable 6,104   5,837  
Total current liabilities 11,573 11,975
   
Total liabilities 11,573   11,975  
 
Commitments and contingencies - -
 
Shareholders’ equity

Ordinary shares (US$0.001 par value; 100,000,000
authorized 12,938,128 and 12,938,128 shares issued and
outstanding as of June 30, 2017 and December 31, 2016, respectively)

 

101

 

101

Additional paid-in capital 26,049 26,049
Accumulated other comprehensive income (6,702 ) (5,891 )
Retained earnings 608,877   761,365  
Total shareholders’ equity 628,325   781,624  
   
Total liabilities and shareholders’ equity 639,898   793,599  
 
 

PLASTEC TECHNOLOGIES, LTD.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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

 
  For the 6-month

period ended June 30,

2017   2016
HK$   HK$
Operating activities
Net (loss)/income (1,112 ) 109,483
Less: Net income from discontinued operations -     (104,086 )
Net (loss)/income from continuing operations (1,112 ) 5,397
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 4,280 4,422
Gain on disposal of property, plant and equipment - (15 )
Changes in operating assets and liabilities:
Deposits, prepayment and other receivables (262 ) (13,930 )
Other payables and accruals (695 ) (4,375 )
Tax payables 270     (94 )
Net cash provided by/(used in) continuing operations 2,481 (8,595 )
Net cash provided by discontinued operations -     125,596  
Net cash provided by operating activities 2,481     117,001  
 
Investing activities
Purchase of property, plant and equipment (23,223 ) -
Proceeds from disposal of property, plant and equipment - 15
Proceeds from consideration receivable, net 128,702     -  
Net cash provided by continuing operations 105,479 15
Net cash used in discontinued operations -     (17,679 )
Net cash provided by/(used in) investing activities 105,479     (17,664 )
 
Financing activities
Dividends paid (151,376 )   (20,183 )
Net cash used in continuing operations (151,376 )   (20,183 )
Net cash provided by discontinued operations -     3,775  
Net cash used in financing activities (151,376 )   (16,408 )
 
Net (decrease)/increase in cash and cash equivalents (43,416 ) 82,929
 
Effect of exchange rate changes on cash and cash equivalents (811 ) (9,255 )
Cash and cash equivalents, beginning of period 486,222     475,361  
Cash and cash equivalents, end of period 441,995 549,035
Less: cash and cash equivalents from discontinued operations -     (266,378 )
Cash and cash equivalents, end of the period from continuing operations 441,995     282,657  
 
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION FROM

CONTINUING OPERATIONS:

Interest received, net 1,194 489
Income taxes paid/(refund) 115     (424 )
 

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