Operation Reviews
For management purposes, the Group is organised into business units based on their products and services, and the Group is organised on a worldwide basis into four reportable operating divisions, namely:
- hard disk drive components which include voice coil motor ("VCM") plates, disk clamps and air combs;
- precision metal stamping components which mainly include sheet metal machined parts and stamped parts, prototypes, stamping tool design and fabrication;
- automotive components which include car seat track adjusters, car seat recliners and hydraulic steering components; and
- re-rolling steel which include precision cold-rolled steel.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.
Stellar Results for FY2010
Leveraging on the strong demand for HDD worldwide as well as a growing automotive industry in China, Cheung Woh delivered a sterling performance in FY2010. The Company reported revenue of $124 million, up 36.7% from $90.9 in the previous financial year. Sales for the second half of FY2010 saw a hefty 34.9% increase over that recorded for the first half.
Outperforming its top line growth, Cheung Woh's net profit after taxation jumped 208.5% from $4.9 million in FY2009 to $15.2 million in FY2010. The substantial increase in net profit was mainly due to a healthy recovery in HDD demand and China's robust automotive industry, supported by the Company's operational efficiency and tight cost structure. Gross profit margin improved from 18.1% in FY2009 to 23.5% in FY2010.