The impact of the Middle East situation is spreading. TEN PAO GROUP expects profit margins to be under pressure, but demand for energy storage products is increasing

The chairman of TEN PAO GROUP (1979), Hong Guangyi, stated that the impact of rising energy prices due to the situation in the Middle East is beginning to spread. He believes that the gross profit margin will be under pressure this year, and the order period from customers has also shortened. However, the energy crisis has driven demand for energy storage products, and with the recent focus on the higher-margin AI industry chain, the business is currently stable. Order Cycle Has Shortened Hong Guangyi mentioned that the rise in energy prices and commodities is significant, affecting the overall electronics industry, and the company cannot avoid this. Although many order prices were locked in as early as the third quarter of last year, he believes that future orders will still face gross profit margin pressure. He also noted that customers, due to uncertain prospects, have shortened the order cycle, stating, "Previously it was a year, now it's half a year, half a year for (orders)," but the overall order volume remains stable, and a small number of products have successfully increased in price. He further pointed out that under the current energy crisis, many regions in Southeast Asia have a demand for energy storage. TEN PAO GROUP is exploring new energy business opportunities in the area, including promoting household micro-storage systems and "oil-to-electric" outdoor power tools. Seizing AI Layout to Expand Smart Controller Business Hong Guangyi also indicated that in recent years, the company has seized the AI layout and expanded its smart controller (PCBA) business. This product is a core component of electronic devices, enabling intelligent and interconnected functions. There is enormous potential in emerging industries such as data centers, robotics, and electric motorcycles, which also have higher gross profit margins, helping to diversify the risks of traditional battery solution businesses. TEN PAO GROUP reported a net profit of HKD 380 million last year, a slight decrease of 0.8% year-on-year; the final dividend was HKD 0.066 per share, an increase of 10%, with a total annual dividend of HKD 0.128, up 14.3%. During the period, revenue was HKD 5.559 billion, an increase of 3.2% year-on-year, but due to intense competition in the electronics industry and rising raw material costs, the gross profit margin recorded 18.2%, a decrease of 1.3 percentage points