Expert Systems Announces FY25 Interim Results
Actively Responds to Market Challenges Demonstrates Strong Business Resilience
* * * *

(26 November 2024, Hong Kong) Expert Systems Holdings Limited (“Expert Systems” or the “Group”; Stock Code: 8319), a leading technology and innovation company in the Asia-Pacific region, today announced the unaudited interim results of the Company and its subsidiaries (the “Group”) for the six months ended 30 September 2024 (the “Reporting Period”). During the Reporting Period, the Group actively responded to market challenges and achieved an increase in gross profit margin despite the downward adjustment in business volume, demonstrating its strong business resilience.

During the Reporting Period, the Group recorded revenue of approximately HK$437.2 million. Gross profit amounted to HK$70.9 million, and profit for the year was HK$7.1 million. The market environment remained uncertain due to factors such as the global economic slowdown and the ongoing Sino-US competition. Nevertheless, the Group actively addressed the market challenges by optimizing its product mix and implementing effective cost-management measures. As a result, its gross profit margin increased from 14.6% in the same period last year to 16.2% during the Reporting Period, underscoring its unwavering business resilience.

Mr. Andy Lau, CEO and Executive Director of Expert Systems, said: “Recognizing that the macro environment has been impacted by numerous uncertainties, we have not only made efforts to address challenges, but also adjusted our strategies and optimized our costs. In operating our product lines, we have focused our resources on businesses with high growth potential, including cybersecurity, automation, artificial intelligence (AI) and managed services. Through the close cooperation between our subsidiaries, we have been able to realize their respective advantages and provide comprehensive, one-stop solutions to meet the diverse needs of customers. This horizontal development has helped us to integrate the strengths of various business segments, which has not only enabled us to provide customers with high-value-added integrated solutions, but also enhanced our competitive advantage and laid a solid foundation for our business growth. While optimizing our product portfolio, we have also maintained effective capital allocation, focused on profit margin improvement, and actively responded to the changing business environment.”

BUSINESS REVIEW

IT Infrastructure Solutions
The Group has continued to provide world-class IT infrastructure solutions to corporate and institutional customers to meet their needs. In light of the frequent occurrence of cybersecurity incidents in recent years, the Group is committed to deploying appropriate cybersecurity solutions to safeguard its customers’ valuable IT assets. Additionally, in response to customers’ strong demand for automation, the Group also provides a wide range of IT infrastructure solutions that align with market trends and the surging demand. Among them, AI can comprehensively assist customers with business automation. To this end, the Group has developed a series of Generative AI (“GenAI”) applications and now offers a one-stop service that encompasses everything from infrastructure to GenAI applications, thereby eliminating any deployment and maintenance support concerns for customers. At this stage, the Group will prioritize allocating resources to two business growth engines of cybersecurity and automation (including AI). This focus aims to enhance its product portfolio and technical support, committed to providing customers with more valuable and comprehensive solutions, thereby driving business growth.

IT Infrastructure Management Services
The Group anticipates growth in demand for IT infrastructure management services throughout the Asia-Pacific region. The Group’s service desk centers in Guangzhou and Kuala Lumpur provide IT outsourcing, help desk and other services to corporate and institutional customers, supporting over 60,000 incidents each month in seven languages. To address new demand, the Group plans to relocate the Guangzhou service desk center to a new facility and expand its capacity. Furthermore, the Group aims to extend its offerings to managed professional services (MPS), including a Network Operation Center (NOC) and Security Operation Center (SOC). All the above are expected to be completed by the first half of 2025. The service desk centers in both locations will create synergies, effectively balancing resources across regions and providing flexible services to customers, which further enhance the Group’s ability to meet the diverse customer needs. In addition, in response to the rising number of cybersecurity incidents, the Group has increased its resources to provide comprehensive cybersecurity consulting services, aiming to help customers proactively prevent cybersecurity incidents.

AI Business
The Group continues to boost its GenAI business and has successfully developed a series of GenAI products based on cloud or on-premises large language models (“LLM”) for its corporate and institutional customers. The GenAI product series, namely ChatSeries, which includes ChatEnquiry, ChatMinutes and ChatSerivceDesk, offering a variety of functionalities to meet customer needs. Benefiting from the accelerated development of the AI ecosystem in Hong Kong, the Group has received a significant number of inquiries from clients, indicating the strong market demand. This sector is expected to be one of the key drivers in new business growth for the Group.

Mr. Lau concluded: “As we enter 2025, Expert Systems will celebrate its 40th anniversary. The two core businesses of IT infrastructure solutions and IT infrastructure management services, as the cornerstones of Expert Systems, provide us with a solid foundation in a volatile market environment, while allowing us to actively develop new AI businesses. Looking ahead, Expert Systems will continue to focus on implementing strategic initiatives, including optimizing product portfolio and cost management, and continue to invest in technological research and development. We will actively respond to market challenges, strive to create value for shareholders and stakeholders, and drive the company to achieve sustainable growth.”

Read the announcement of the detailed results here: https://www.expertsystems.com.hk/wp-content/uploads/2024/11/EW08319-IR24.pdf

Highlights:

• Revenue for the six months ended 30 September 2024 (the “Reporting Period”) decreased by approximately 15.5% from that for the six months ended 30 September 2023 (the “Corresponding Period”) to approximately HK$437.2 million.
•  Gross profit for the Reporting Period decreased by approximately 6.0% from the Corresponding Period to approximately HK$70.9 million.
• Profit for the period attributable to owners of the Company for the Reporting Period decreased by approximately 16.2% to approximately HK$6.6 million as compared to the Corresponding Period.
• Basic earnings per share decreased by approximately 16.3% from approximately HK0.98 cent for the Corresponding Period to approximately HK0.82 cent for the Reporting Period.

The post Expert Systems (8319.HK) FY25 Interim Results Announcement appeared first on Expert Systems Holdings Limited.

Expert Systems Announces FY24 Annual Results
Two Core Businesses Achieve Growth   Steady Progress in AI Business
* * * *

(26 June 2024, Hong Kong) — Expert Systems Holdings Limited (“Expert Systems” or the “Group”; Stock code: 8319), a leading technology and innovation company in the Asia Pacific region, announced the audited annual results of the Company and its subsidiaries (the “Group”) for the year ended 31 March 2024 (the “Reporting Year”).

During the Reporting Year, the Group’s revenue increased by 11.8% to approximately HK$991.0 million driven by the increase in customer demand. Gross profit amounted to HK$152.7 million, representing an year-on-year increase of 9.6%. Gross profit margin remained stable at approximately 15.4% (FY2023: 15.7%). Profit for the year of the Company recorded HK$17.1 million (FY2023: HK$22.7million), representing a decrease of approximately HK$5.6 million year-on-year. The main reason for this decline is that the Group did not receive any COVID-19 relevant government subsidies during the Reporting Year (Relevant government subsidies in FY2023: HK$5.7 million). In additional, we have increased the investment to our AI business in the Reporting Year.

The Board recommends a final dividend of HK0.82 cent (FY2023: HK1.00 cent) per ordinary share, resulting in a dividend payout ratio of 42.86%. The payment of the final dividend is subject to the approval of the shareholders at the forthcoming annual general meeting.

Mr. Andy Lau, CEO and Executive Director of Expert Systems, said: “Despite the challenging business environment, the Group has delivered a resilient performance in FY2024. Leveraging our strong foundation and exceptional products, solutions and services, we have adeptly navigated the dynamic market landscape. Throughout the past fiscal year, our two core businesses have exhibited steady growth, while our AI business has successfully launched new products, starting to contribute to our revenue.”

Business Review

IT Infrastructure Solutions
Regarding the IT infrastructure solutions business, the Group believes that enterprises and institutions will continue to adopt digital transformation to enhance operational efficiency, leading to a strong demand for IT-related one-stop solutions. Particularly, given the escalating cybersecurity incidents, the Group is committed to persistently deploying world-class cybersecurity solutions to safeguard the customers’ valuable IT assets. It is worth mentioning that the Group is customizing robust IT infrastructure tailored for our own developed Generative AI (“GenAI”) applications to meet customers’ diverse needs. To align with market trends and significant demand, the Group will prioritize resources in two key business opportunities of Cybersecurity and GenAI, and strive to provide higher value and more comprehensive total solutions to customers.

IT Infrastructure Management Services
The Group’s IT infrastructure management services business foresees sustained demand across the Asia-Pacific region. This includes IT outsourcing, helpdesk support, workflow automation services, and IT hardware maintenance for enterprises and institutions. The Group plans to extend its services into Managed Professional Service to further enhance its range of managed services offerings. This dedicated facility will leverage the existing resources of its service desk centres, enabling to extension of the managed services from endpoints and devices to encompass network systems and server host systems for valued customers.

The group currently operates service centers in Guangzhou and Kuala Lumpur. The services are provided in seven languages, handling over 60,000 cases per month. The Group plans to expand the capacity of the Guangzhou service desk center and relocate it to a new facility, creating a synergistic effect with the Kuala Lumpur service desk center. This will effectively balance resources across different regions and enhance the ability to provide flexible services to meet diverse customer needs.

AI Business
Regarding the AI business, the Group has successfully developed a range of GenAI products based on cloud and on-premises large language models for its corporate and institutional customers. The Group’s GenAI product series, namely ChatSeries, encompasses a variety of GenAI functions, including ChatEnquiry, ChatSerivceDesk and ChatMinutes etc. During the pre-launch stage of this product series, the group received a large number of inquiries reflecting a fervent market demand. In addition, the Group announced last year the establishment of the strategic partnership with Lenovo Hong Kong, with a specific focus on serving the primary and secondary school market. In fact, the Group has developed the SmartSeries product line, which includes SmartAqua, SmartRetail, and SmartHome, providing AI labs setups and relevent training courses tailored to primary and secondary schools. The group is currently collaborating with Lenovo Hong Kong to jointly market the SmartSeries AI products.

Mr. Lau, concluded: “Looking ahead, besides continue to grow our core businesses in providing one-stop IT solutions for the public and private sectors in the Asia-Pacific region, we will also continue to actively advance our AI products and solutions, aiming to bring strong growth momentum to the group. We are optimistic about the future, and we will eagerly to explore new growth opportunities with an open and innovative mindset, in order to achieve the company’s long-term sustainable development goals.”

Read the announcement of the detailed results here: https://www.expertsystems.com.hk/wp-content/uploads/2024/06/EW08319-ann-1.pdf

Highlights:

• Revenue for the year ended 31 March 2024 (the “Reporting Year” or “FY2024”) increased by approximately 11.8% from that for the year ended 31 March 2023 (the “Corresponding Year” or “FY2023”) to approximately HK$991.0 million.
• Gross profit for the Reporting Year increased by approximately 9.6% from the Corresponding Year to approximately HK$152.7 million.
• Profit for the year attributable to owners of the Company for the Reporting Year decreased by approximately 21.8% to approximately HK$15.4 million as compared to the Corresponding Year. (Note)
• Basic earnings per share decreased by approximately 22.0% from approximately HK2.45 cents for the Corresponding Year to approximately HK1.91 cents for the Reporting Year.

The post Expert Systems (8319.HK) FY24 Annual Results Announcement appeared first on Expert Systems Holdings Limited.