Strong growth in the wearable device and mobile phone markets powered Hong Kong-based mold maker and plastic component molder TK Group Holdings Ltd. to $95 million (HK$734 million) in sales in the first six months of 2015, up 39 percent from the same period in 2014.
The Hong Kong-listed firm saw its gross profit climb to $23 million (HK$184 million) for the first half of 2015, up from $17 million (HK$135 million) in the year-earlier period — a 36 percent jump.
“In spite of the complicated domestic and international economic environment and increased downward pressure on the Chinese economy, the company adapted itself to the changes in the market and the development of the Age Of Big Health by catering to the rapid development of wearable devices industry and by benefiting from strategic product restructuring in 2014, including exploitation and promotion of the development of related products in both mobile phones and wearable devices and medical and health care industries,” the company said in its interim report.
Sales of plastics components leaped 64 percent to $63 million, led by the wearable and mobile phone markets, where sales surged to $23 million (HK$176 million). Other leading markets include commercial telecommunications equipment ($22 million), automotive ($15 million), medical devices ($12 million), household electrical appliances ($11 million) and video game equipment ($2.4 million).
Sales of molds rose slightly to $31.5 million (HK$244 million). The company expanded mold production in the fourth quarter of 2014, including establishing new business units dedicated to ultra-large standard molds and precision molds. Due to long lead times for the mold making business, it expects to see a sales jump in the fourth quarter of this year.
Many of TK's mold customers are in Europe, where the weak euro contributed to a decline in gross margin for mold production to 28.3 percent, compared to 33.3 percent in the year-previous period.
TK said it “continue to strive to enhance automatic and streamlined production and increase investments in research and development and production automation.” It plans to invest more than $2.5 million (HK$20 million) this year on automation equipment such as robot arms.
TK has three factories in Shenzhen and a factory in Suzhou. As of June 30, the company had 3,436 full-time employees and 854 contract workers.