【Kingboard Performance】Kingboard Group Earnings Surge 1.7 Times Year-on-Year; Final Dividend Plus Special Dividend Totals @1.51 Per Share; Zhang Guorong: Future Hundred-Billion Investment Won't Harm Dividend Distribution (Second Edition)

Cheetah Group Announces Results, Cheetah Group (00148) Reported a 1.7-fold increase in profit for the full year, reaching HKD 4.402 billion; revenue for the period was HKD 45.375 billion, up 5.3% year-on-year. Basic earnings per share were HKD 3.971. A final dividend of HKD 1.11 per share is proposed, compared to HKD 0.54 last year; a special dividend of HKD 0.4 (versus HKD 0.46 last year) is also paid, making a total of HKD 1.51 per share including the special dividend.

To meet AI demand, Cheetah plans to invest HKD 12.3 billion over the next two years. When asked if large investments would affect dividends, Chairman Cheung Kwok-wing said that due to significant quarterly profit increases, he is confident in maintaining dividend levels. Executive Director Cheung Ka-ching added that this year, Cheetah’s laminated board (01888) plans to invest HKD 2.8 billion, Cheetah Chemical Industry will invest HKD 1.2 billion, and printed circuit board investments will total HKD 2 billion. Remaining investments will be made next year.

Ability to Pass Raw Material Costs to Customers

Amid recent political instability and rising prices of raw materials like copper, Cheung Kwok-wing stated that as an industry leader, Cheetah has the ability to pass costs to customers. “Raw material prices follow market trends, and goods rotate,” but many private sector peers are affected by the sharp increase in costs.

Cheetah Laminated Board Chairman Cheung Kwok-wah added that the company needs to purchase about HKD 1 billion worth of copper monthly for production. The copper mainly comes from mines in South America and is unaffected by Middle Eastern tensions. He also mentioned that they started increasing reserves six months ago and currently have sufficient stock, confident in handling current challenges.

Cheetah stated that last year, the electronics market was booming, with rapid AI development and strong demand for emerging electronic products related to AI, which boosted profits in its copper-clad laminate division compared to the previous year. The investment business division also saw profit growth year-on-year, benefiting from the vertically integrated industry chain and diversified business portfolio advantages.

Cheetah Laminated Board announced that for the full year ending December last year, net profit attributable to shareholders was HKD 2.442 billion, up 84.16% year-on-year; revenue was HKD 20.4 billion, up 10%. Earnings per share were HKD 0.782. Total dividends paid were HKD 0.53, including a final dividend of HKD 0.25 and a special dividend of HKD 0.28, compared to HKD 0.5 last year.

Cheetah Cheung Kwok-wing: Yang Guoqiang Proactively Contacted

Additionally, Cheetah previously applied to the court for liquidation of Country Garden (02007) to recover HKD 1.6 billion in unpaid loans and interest. After reaching an agreement, the court withdrew the liquidation petition last month. Cheung Kwok-wing revealed that two or three months before the withdrawal, Country Garden founder Yang Guoqiang proactively contacted him by phone. He also said the terms were similar to those with other creditors, and Yang promised to continue paying interest, so Cheetah agreed to withdraw the liquidation application.

Country Garden’s offshore debt restructuring plan of USD 14.1 billion has been approved by the court. The plan includes cash payments, convertible bonds, and new notes with a maximum term of 11.5 years, reducing debt by up to USD 11.6 billion.

However, Cheetah has already provisioned HKD 900 million for loans to Country Garden in 2023, and in 2024, provisions for loans to Country Garden and Fuli Properties will total over HKD 1.4 billion. When asked if these provisions might be reversed in the future, Cheung Ka-ching responded, “Once provisions are made, that’s it. Focus on our own business. If we recover funds later, we will consider reversing the provisions then.”

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