CEO Message
Dear Valued Shareholders,
It gives me great pride to share our performance for FY’24, a year in which InnoTek made significant strides to transform, reach new markets, and strengthen our foundations – all amidst a challenging environment. Allow me to highlight some of our major achievements.
First, as shareholders are aware, we recently began manufacturing GPU server components. In a relatively short period, we have emerged as a key supplier to a market leader. Building on this foundation, we have positioned InnoTek to capitalise on the broader trends across the spectrum of various segments which require GPU servers such as artificial intelligence and cloud computing.
Second, we are deepening our penetration into new sectors such as gaming machines, medical equipment, and financial equipment. Our Auto segment has also evolved as we start to manufacture new components tailored for the rapidly expanding EV market. These new revenue streams will not only make us more resilient but also pave the way for sustainable long-term growth.
Third, we are moving up the value chain for our manufacturing capabilities. In January 2025, we established a wholly owned subsidiary, Mansfield Surface Treatment (Dongguan) Co., Ltd. to enhance our product processing to deliver higher-quality products in a shorter time.
Lastly, we are growing our ASEAN footprint in Thailand and Vietnam with a total of three locations in the two countries. In line with this strategy, we are actively exploring opportunities to expand manufacturing operations in Southeast Asia.
The combination of the above will allow InnoTek to plan and execute more advanced processes and greater automation across a diversified footprint. Amid the relentless demand from customers to innovate, develop new capabilities and improve quality, we are also continuously improving internal efficiencies across multiple geographies. Through these efforts we intend to continue to expand our customer base.
Financial Review
During FY’24, the Group achieved revenue of S$238.0 million, a 15.8% increase year-on-year, as nearly all our business segments secured higher sales volumes.
Our GPU Server business, which saw the highest growth, contributed S$35.6 million in FY’24 (FY’23: S$20.5 million), equivalent to approximately 15.0% of Group-wide revenue (FY’23: 10.0%).
The Office Automation (“OA”) segment recorded higher sales from the ASEAN region. This was offset by softer orders from China as our customers continue to relocate their manufacturing to ASEAN countries amid US-China trade tensions. Meanwhile, our TV/Display customers launched new products during FY’24, contributing to higher turnover.
Our Auto business saw a boost from rising international demand and greater adoption of EVs in China, which offset a decline in sales of traditional petrol car components. Despite the improved turnover, we experienced lower margins, unexpected volume drops, or premature end-of-life cycles for certain projects due to intense sector turbulence.
To mitigate these risks and ensure a more stable revenue stream, InnoTek is actively managing our client portfolio. As part of this process, we incurred S$3.8 million allowance for automotive tooling and inventory obsolescence during the year under review.
We also recorded a S$2.2 million charge for property taxes, and impairment of other assets of the Group.
Gross profit rose 10.6% to S$36.4 million, up from S$32.9 million in FY’23, reflecting the Group’s ability to drive growth despite evolving market conditions. Gross profit margin stood at 15.3%, compared to 16.0% in the prior year.
FY’24 net profit attributable to owners of the Company increased 23.4% to S$5.8 million from S$4.7 million in FY’23. Had it not been for the S$6.0 million in exceptional items, net profit would have been S$11.8 million in FY’24 which would have been a significant improvement from S$6.3 million before exceptional items in FY’23.
Earnings per share for FY’24 rose to 2.51 Singapore cents from 2.01 Singapore cents a year ago, while net asset value per share increased to 76.2 Singapore cents as at 31 December 2024, compared to 74.9 Singapore cents as at 31 December 2023. We continue to maintain a robust balance sheet, with a net cash balance of S$65.1 million, which includes our investment portfolio as at the end of FY’24.
As we move into FY’25, the Group is pursuing a growth strategy which combines all four initiatives set out above. We are innovating new products, such as liquid cooling systems, for our GPU Server product line. At the same time, we are rapidly adapting to the shifting trends in the Auto industry in order to align ourselves with our Tier 1 customers.
For our Thai and Vietnamese operations, we are accelerating internal efficiencies while manufacturing more component types each year.
Meanwhile, the TV/Display and OA segments will continue to remain resilient, and in response, we will continue to upgrade our capabilities, maintain a low-cost structure, and work closely with our customers to meet their needs.
We will continue to maintain a healthy balance sheet and improve our core values of QCDS – quality, cost, delivery and service – to sharpen our competitive edge in this challenging operating environment.
APPRECIATIONOur success has been built on the trust and confidence of our business associates and valued clients; I wish to express my gratitude for all the partnerships we have cultivated, and we remain committed to creating products and solutions that last and add value.
At the heart of InnoTek’s progress is our dedicated management team and employees, whose hard work and commitment continue to propel the company forward. I extend my sincere gratitude to each member of our team—you are the foundation of our achievements.
This year also marks a transition within our Board. Our Independent Director Mr Teruo Kiriyama will be retiring after more than nine years on the Board. We are immensely thankful for his contributions throughout his time with us. At the same time, we are pleased to welcome our latest Independent Director Mr Ng Hin Lee. With over 30 years of financial and managerial experience, Mr Ng brings a wealth of knowledge to the team, and we look forward to his insights.
Our leadership team has also been further strengthened with the appointment of Ms Angeline Tan as Group CFO in June 2024. With an impressive 30-year track record spanning finance, human resources, market development, and business operations, Ms Tan’s experience will be invaluable as we sharpen our financial strategies and operational capabilities.
Finally, to our shareholders, thank you for your continued trust and belief in InnoTek. We remain steadfast in our commitment to delivering sustainable long-term value, and we look forward to building on this journey together.
Mr. Lou Yiliang
CEO, Executive and Non-Independent Director
