Tat Hong Equipment Service Co., Ltd. Announces 2023/24 Annual Results

Tat Hong Equipment Service Co., Ltd. (Tat Hong or the Company, together with its subsidiaries, the Group) (HKG: 2153), the first foreign-owned tower crane service provider established in the PRC, has announced its annual results for the year ended 31 March 2024 (FY2024 or the Year).

In FY2024, the Group recorded revenue of RMB682.3 million (FY2023: RMB770.8 million). Loss attributable to equity holders of the Company for the Year amounted to RMB95.6 million (FY2023: net loss of RMB35.8 million). The increase in losses was primarily due to the sluggish economic growth and construction sector recovery following the COVID pandemic, which resulted in a decrease in the average monthly service price for tower cranes per tonne meter (TM) in use, from RMB241 to RMB215. The overall gross profit and gross profit margin decreased to RMB80.8 million and approximately 11.8%, respectively.

The Group’s total TM in use decreased from 3,192,710 for the year ended 31 March 2023 to 3,178,404 for the year ended 31 March 2024. As at 31 March 2024, the Group had 259 projects in progress with a total outstanding contract value of approximately RMB417.7 million and 168 projects on hand with a total expected contract value of approximately RMB690.3 million.

While maintaining its market position in the domestic tower crane service industry, the Group expanded its geographical footprint to the Greater Bay Area to include Hong Kong and Macau, and formed a joint venture in Indonesia. They will primarily serve the present customers of Chinese EPC contractors in the PRC that have expanded overseas. Meanwhile, the business portfolio has been expanded to include construction projects related to clean energy, thermal power and nuclear power. This geographical and business expansion is expected to improve the Group’s financial performance in the coming year.

During the Year, the Group continued to invest in the digitalization of its management platform and in the research and development of new tower crane technical solutions. As of 31 March 2024, the Group possesses 158 registered patents for utility models and inventions related to tower cranes. The robust technical capabilities will continue to enable the Group to procure projects, and the enhancement of its research and development capabilities for tower crane technical solutions will reinforce its excellent service delivery.

Mr. Sean Yau, CEO of Tat Hong Equipment Service Co., Ltd. said, “In addition to the RMB1 trillion of low-cost financing for three major types of infrastructure projects, namely urban village redevelopment, affordable housing projects and ‘dual-use for normal and emergency purposes’ projects, the PRC central government has launched a series of favourable policies and programs to promote economic development. The removal of home purchase restrictions, the reduction in down payments and the decrease in mortgage rates, etc. will improve property market activity. In addition, with the ‘14th Five-Year Plan’, new infrastructure, traditional infrastructure and energy transformation will be a major task of the government, which will facilitate the overall development of the industry.”

Mr. Roland Ng, Chairman of Tat Hong Equipment Service Co., Ltd. added, “Although the property market and the construction industry in the PRC were in a downturn, the Group promptly made adjustments to its development strategies, including expansion into the clean energy construction segment and geographical expansion to the Greater Bay Area and Indonesia, in response to the difficult and rapidly changing business environment. Guided by the core corporate values of ‘Virtue, Safety and Excellence’, we will continue to focus on the research and development of new tower crane technologies to equip ourselves with the most robust technical capabilities to provide excellent services to our clients. We will continue our efforts to optimize our operations and digitalize our management platforms to achieve resource sharing, cost reduction and efficiency enhancement. With all of the above measures, we believe we can fulfil the Group’s goal of becoming the best construction equipment service provider in the industry.”

About Tat Hong Equipment Service Co., Ltd. (Stock Code: 2153)

Tat Hong Equipment Service Co., Ltd. is the first foreign-owned tower crane service provider established in the PRC. Since 2007, the Group has established as a tower crane service provider for one-stop tower crane solution services from consultation, technical design, commissioning, construction to after-sales services primarily to Chinese Special-tier and Tier-1 EPC contractors. Guided by its core values, “Virtue, Safety and Excellence”, the Group has successfully established its market position and maintained stable, reputable and loyal customer base in the construction industry in the PRC.