Chairman Statement

2015 was a remarkable year for us. We made a move to one of the most recognised capital markets in the world. The shares of In Construction Holdings Limited were listed on The Stock Exchange of Hong Kong Limited on 16 April 2015. The listing provided additional funding capital to improve our financial position, strengthened our transparency for negotiating banking facilities and enhanced our capacities to undertake sizeable construction projects.
 
Our financial performances these last few years have continued to steadily grow. This financial year, our net profit reached HK$92.1 million, with a turnover of HK$497.3 million. Our financial position has further improved. We reduced our trade creditors substantially to HK$67.0 million, and managed to retain over HK$229.6 million cash. Due to the results detailed above, which were satisfactory overall, our board decided to recommend a final dividend of HK$0.034 per share in accordance with our dividend policy.
 
Our Group, founded in 1996, is an experienced general and foundation contractor serving the Hong Kong building and construction industries by offering quality and flexible solutions to our customers. Over the years, our client base has expanded through word of mouth, with most of them being repeat customers. Using our ability to solve different complex issues on various projects, we have built trust and credibility with our customers. We definitely could not have done it without the support of our working partners, who have been working with us job by job over the years. The implementation of our self-developed, successful formula in project management, together with our strong bond with our customers and working partners, has enabled us to withstand every predicament in the last two decades.
 
In recent years in Hong Kong, a strong demand for more housing and the commencement of ten major infrastructure projects by government have seen a blossom in the construction industry. Some contractors, including us, have seized the moment for expansion. However, filibustering of the legislative council in Hong Kong has turned feast to famine for most construction companies. The prolonged dispute in the legislative council has postponed government funding and, as a result, some large infrastructure projects have been suspended. Some public sector contractors have diverted to the private sector in order to avoid idling resources, which resulted in keener competition than usual.
 
We experienced steep competition among contractors in tendering for new projects, even though we started tendering with low margin in last few months. It has been almost one year since we were awarded a new contract in August 2015. Our peers are competing more and more aggressively to secure the relatively few new contracts that come to market.
 
The situation seems pessimistic, and we remain vigilant to the potential further deterioration caused by these changes. However, we are well-positioned in the market as our operation model of subcontracting works allows us flexibility and strengthens our resilience toward any adverse impact. We also foresee uncertainties in metal price, economic atmosphere and political climate, therefore we are prepared to wait out the storm, preserve our resources and potentially seize opportunities in the future.
 
Looking ahead, we will continue to adhere to our strategy of focusing on ‘design and build’ projects and are committed to expanding our operation scale. Our management team is convinced that we will continue to build value over the medium to long term for our shareholders. Last but not least, I, on behalf of our board, would like to express our sincere gratitude to our management and all our staff for their hard work and dedication, as well as our shareholders, business associates and other professional parties for their support throughout the year.
 
Lau Pak Man Chairman
Hong Kong, 24 June 2016