On November 27, Gelonghui Technology (01729.HK) announced that in its interim results for the six months ended September 30, 2023, the Group's earnings for the reporting period decreased 19.9% year-on-year to HK$2,627 billion. This decrease is mainly due to reduced revenue from the server business and the digital cable business. The Group's profit for the reporting period was HK$151 million, up 65.7% from the same period last year, and recorded a net profit margin of 5.8% compared to 2.8% for the same period last year. In the reporting period, the basic profit per share was HK7.8 cents, compared to HK4.7 cents in the same period last year. The Board is pleased to announce an interim dividend of HK0.75 cents per share.
Thanks to China's huge market potential in the fields of cloud services, communications, transportation and electricity, the Group expanded its business to server business last year with a market-entry strategy and JDM/ODM business model, which is deeply customized according to the needs of brand customers.
The products provided by the Group under this business are mainly used in data centers, including rack-mounted computing power servers, edge servers, AI intelligent servers, storage servers, smart network cards, GPU cards, and complete cabinet products. Considering (i) China is actively investing to build digital infrastructure; (ii) Chinese manufacturers continue to increase their share of the local supply chain due to geopolitical relationships; and (iii) Lixun Precision has extensive technical knowledge and good customer relationships, the Group is optimistic about the future growth potential of the server business. The Group believes that expanding the server business is a good opportunity for the Group to further develop its business and will help diversify the Group's business and the Group's revenue sources.