Yau Lee Holdings (00406) released its audited results for the year ended 31 March 2026, reporting record-high revenue yet a wider bottom-line loss.
Revenue and Profitability • Group revenue climbed 13% year on year to HK$10.92 billion (FY25: HK$9.62 billion), the third consecutive annual increase. • Gross profit more than tripled to HK$447.38 million, lifting the gross margin to 4.1% (FY25: 1.4%). • A sharp fall in other income—mainly the absence of last year’s HK$468.20 million relocation compensation gain—combined with higher operating expenses and continued project-related losses, pushed the Group to an operating loss of HK$156.92 million (FY25 operating profit: HK$66.25 million). • Loss attributable to shareholders widened to HK$203.77 million from HK$98.88 million; basic and diluted losses per share increased to HK46.52 cents (FY25: HK22.57 cents).
Segment Performance • Construction: Revenue rose 6% to HK$7.64 billion; segment loss expanded to HK$223.52 million, weighed by pandemic-era projects facing cost overruns and material price mismatches. • Electrical & Mechanical (E&M): Revenue jumped 30% to HK$2.93 billion; segment profit improved to HK$59.25 million, supported by Mainland China and environmental engineering contracts. • Building Materials Supply: Revenue increased to HK$131.65 million; segment profit reached HK$60.22 million despite ramp-up costs for a new Dongguan plant. • Property Investment & Development: Revenue surged to HK$139.96 million, aided by residential unit disposals, yet the segment posted a HK$38.82 million loss after a HK$12.60 million fair-value drop in investment properties. • Hotel Operations: Reopening contributed HK$70.67 million revenue; depreciation led to a HK$4.84 million segment loss, though management highlighted positive EBITDA.
Order Book and New Wins • New contract awards totalled HK$4.76 billion (FY25: HK$6.68 billion), including a record HK$5.41 billion for the E&M division. • Outstanding contracts stood at HK$44.11 billion as at 31 March 2026, down 8.5% from HK$48.21 billion a year earlier. E&M backlog reached an all-time high of HK$17.15 billion, while construction backlog remained solid at HK$30.99 billion.
Balance Sheet and Liquidity • Cash and bank balances increased to HK$1.13 billion (FY25: HK$770.23 million). • Total borrowings rose to HK$3.21 billion (FY25: HK$2.75 billion) to fund peak-stage project working capital, leaving net debt at approximately HK$2.08 billion. • Current ratio held at 1.1; management noted that reclassification of a term loan maturing in two to three years as current liability reduced the ratio by 0.1. • Net assets attributable to shareholders fell to HK$1.23 billion, equal to HK$2.82 per share (FY25: HK$3.14).
Dividend No interim or final dividend was declared for FY26 (FY25 total: HK2.50 cents per share) as the Board opted to preserve cash for future projects.
Management Outlook The company highlighted a favourable medium-term pipeline driven by Hong Kong’s public-works agenda—including Northern Metropolis developments and a 196,000-unit public-housing target over five years—alongside growing environmental engineering opportunities. Yau Lee plans to deepen its smart manufacturing, green energy and Greater Bay Area initiatives while focusing on operational efficiencies and technology-driven construction methods to enhance margins.
The Motto by Hilton Hong Kong SoHo hotel, reopened post-refurbishment, achieved occupancy above 90% by year-end and management anticipates a “healthy profit” contribution in FY27.