WILLAS-ARRAY ELECTRONICS (HOLDINGS) LIMITED
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MANAGEMENT DISCUSSION AND ANALYSIS
Industrial
Year-on-year revenue growth from this segment was flat at HK$771.3 million. Due to the soft demand
from both export and domestic markets, the performance of this segment was not good in the beginning
of FY2016 but this was partially offset by an improvement in the market situation in the second half of
FY2016 and the increase in demand for inverter type application. The segment’s stable demand for
componentry presents opportunities for us to drive sales through offering value added services to our
customers. The new potential is the Industry 4.0, in which we will well equip our engineering resources to
tackle the opportunities.
Dealer
In FY2016, this segment was impacted by unfavourable market conditions and intense price erosion and
revenue decreased 5.1% year-on-year to HK$470.4 million. In addition, the weak economic condition
limited the borrowing power of our customers, who were reluctant to stock up on inventory. To mitigate
the situation, the Group tried its best to secure our share, and at the same time carefully monitor our
inventory levels and the credit position of our customers.
Home Appliance
Revenue from this segment was HK$437.7 million, a drop of 5.7% as compared to last year. This
segment was also impacted by weak export and domestic demand. Although the China government’s
easing of the real estate sector in the second half of FY2016 did help to improve domestic demand for
home appliances, it was not enough to boost revenue to FY2015 level. Although the current situation is
not very good, we believe the long-term prospects of this segment and the strong customer base make
it viable for us to continue our investment in engineering resources and to source more good suppliers to
expand our market share in this segment.
Automotive
Revenue from this segment was HK$327.4 million, a strong year-on-year increase of 22.0%. The
automotive market had a strong rebound in the second half of FY2016 after the China government
launched a new stimulation policy in September 2015. It helped the car makers, dealers and the supply
chain to improve sales and clear some excessive inventory. The market became healthier and back on
track for stable growth.
Audio and Video
This segment registered a marginal year-on-year decline of 0.8% in revenue to HK$251.3 million in
FY2016. This segment, which mainly covers traditional audio equipment, is rapidly being replaced by
mobile devices thus leading to a continuing decline in demand. Although we developed some new
solutions for high-end portable audio and bluetooth speakers, it could only partially offset the falling sales
of traditional audio products. Moving forward, we will vigilantly monitor the volatility of the consumer
electronics market, and also efficiently allocate resources to support customers’ development, track their
forecast as well as manage our inventory levels carefully.
