TEN PAO GROUP: Currently, orders are stable, but gross profit margin is expected to face certain pressure in the first half of the year

The chairman and CEO of TEN PAO GROUP (01979.HK), Hong Guangyi, stated that under unstable macroeconomic conditions, smaller peers find it difficult to survive. However, the company's current orders are stable, and the contract period has been shortened according to customer requirements, with slight price increases.

Executive Director and Chief Financial Officer Xie Zhongcheng added that the contracts signed with customers include clauses related to price increases, but this does not immediately pass on the cost increases to customers and requires negotiation. He mentioned that due to rising international energy and commodity prices, the gross profit margin is expected to face certain pressure in the first half of this year, but the company has also taken proactive measures, such as locking in raw material costs.

Regarding production capacity, the Huizhou Industrial Park officially commenced production last year. Xie Zhongcheng indicated that there are currently no plans to increase capacity or set up new factories, but adjustments may be made in the future based on customer demand, such as observing an upward trend in demand from Africa. He expects this year's capital expenditure to be slightly lower than last year, ranging from 150 million to 180 million yuan.

In terms of business expansion, Hong Guangyi believes that it is not the right time for mergers and acquisitions. The company will actively layout more new business directions and products, such as electric two-wheelers and data centers, and expects that products like smart controllers and backup battery modules still have significant development space