Sunray Engineering Group Turns Profitable in FY2026 on Improved Project Mix and Lower Impairments

Bulletin Express
06/26

Sunray Engineering Group (Sunray Engineering) reported a turnaround for the financial year ended 31 March 2026, posting net profit of HK$4.23 million versus a loss of HK$13.28 million a year earlier.

Revenue and Margin • Revenue rose 9.25% year-on-year to HK$177.48 million, driven by a 26.3% jump in building-protection works to HK$148.06 million, which offset a 34.9% decline in product sales to HK$29.42 million. • Gross profit increased 10.1% to HK$54.28 million; gross margin widened slightly to 30.6% (FY2025: 30.3%).

Cost and Expense Highlights • Impairment losses under the expected credit loss model fell sharply to HK$0.14 million from HK$13.02 million. • Selling and distribution costs decreased 16.1% to HK$6.12 million, while administrative expenses were broadly flat at HK$41.52 million (+1.0%). • Finance costs declined 31.6% to HK$0.70 million, reflecting lower average borrowings and effective rates.

Earnings • Operating profit rebounded to HK$6.03 million from a loss of HK$12.51 million. • Net margin improved to 2.4% (FY2025: –8.2%). Basic earnings per share reached 0.42 HK cents (FY2025: loss per share 1.33 HK cents).

Balance Sheet and Liquidity • Cash and cash equivalents increased to HK$74.69 million (31 March 2025: HK$49.12 million). • Interest-bearing borrowings fell to HK$18.27 million, cutting the gearing ratio to 10.3% from 13.8%. • Current ratio edged up to 2.9 times (31 March 2025: 2.8 times) with net current assets of HK$132.73 million. • The group’s property with a carrying value of HK$38.09 million remains pledged against banking facilities.

Operational Metrics • During FY2026, 409 projects representing original contract value of HK$1.27 billion were secured; 57 projects (HK$232.60 million) were completed. • At period-end, 352 projects were in progress with outstanding contract value of HK$1.04 billion.

Segment Performance • Building-protection works accounted for 83.5% of total revenue, generating segment profit of HK$40.74 million (+37.4%). • Building-protection products contributed 16.5% of revenue with segment profit of HK$13.54 million (–31.1%).

Capital Management and Dividends • No dividend was declared for FY2026, consistent with the prior year. • No share repurchases, material acquisitions, or disposals were undertaken during the period.

Outlook and Risk Considerations Management cited continued tender competition, cost inflation, and macro-economic uncertainty as key challenges. Priorities include stringent cost control, selective investment, and further penetration in Hong Kong’s building-protection market to sustain profitability and enhance shareholder value.

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