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chairman's statement

Extracted from Annual Report 2018


The Chuan Hup Group (the "Group") delivered another year of strong performance for the financial year ended 30 June 2018 ("FY2018").

Dear Members,

The Chuan Hup Group ("The Group") delivered another year of strong performance for the financial year ended 30 June 2018 ("FY2018"). Revenue registered double-digit growth, reaching USD345.30 million, a commendable achievement by the Group. This represented an increase of 21.9% over USD283.19 million in the previous year. Net profit came in at USD17.53 million compared with USD20.43 million for FY2017, attributed partially to lower property sales, decrease in fair valuation of financial investments and higher employee benefit expense of our subsidiary, PCI Limited.

ROBUST GROWTH MOMENTUM

Growth momentum for FY2018 continued to be robust, driven by healthy expansion in electronics manufacturing services. Against a backdrop of improved macro-economic environment and stable financial markets, the Group saw significant increase in demand for our electronics manufacturing solutions during the financial year under review.

During the financial year, the Group's property development projects in Perth, Concerto and Unison on Tenth, continued to generate steady sales on the back of gradually improving market sentiment.

STRONG CAPITAL STRUCTURE

As a result of the prudent management and cost control measures that we have put in place, the Group's balance sheet remains healthy. The Group generated total cash flow of USD23.55 million from operating activities during the year, resulting in cash and cash equivalents of USD116.96 million as at 30 June 2018, up 14.0% compared to USD102.64 million as at 30 June 2017. Total assets amounted to USD405.66 million, with net assets attributable to equity holders reaching USD285.59 million.

SHARING OUR SUCCESS

We have and will continue to share the Group's success with our shareholders. We will continue to focus on adopting a balanced growth strategy geared to achieving long-term sustainable growth and delivering stable returns to them.

In this regard, the Board has proposed a final tax-exempt one-tier dividend of 1 SG cent per ordinary share for FY2018, subject to approval of shareholders at the coming Annual General Meeting ("AGM") to be held on 18 October 2018, in line with our dividend policy of paying up to 50% of net profit after tax.

OUTLOOK

The Group maintains a cautious outlook for FY2019 given the uncertainties caused by the prevailing US-China trade conflict, which may increase volatility in the financial markets. Property market conditions in Perth are likely to continue to improve gradually.

We will continue to remain vigilant and focused on strategies that can lead to long-term sustainable growth. In this respect, we will exercise prudence when considering new investments and business expansion opportunities.

ACKNOWLEDGEMENTS

I am pleased to welcome Ms Heng Su-Ling Mae as Non-Executive, Independent Director to the Board. With her extensive experience and expertise in audit, corporate finance and business advisory services, I am confident that she will be a strong asset to us.

Mdm Joanna Young Sau Kwan will be retiring as Non-Executive, Independent Director at the coming AGM and not seeking re-election. On behalf of the Board, I would like to express my heartfelt appreciation to Mdm Young for her dedication and contributions during her 15 years of service on the Board.

I would like to extend my appreciation to my fellow Directors for their guidance and counsel during the year. I wish to thank our partners, customers and stakeholders for their support and co-operation. Last but not least, I would like to express my appreciation to the Management and staff of the Group for their hard work and dedication in working together to deliver another year of exceptional performance.

MR LO PANG FOO STEVEN

Non-Executive Chairman
7 September 2018

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