Management > Chairman's Statement
Board of Directors
Chairman's Statement

INTRODUCTION
On behalf of the board (the “Board”) of directors (the “Directors”) of Ming Hing Waterworks Holdings Limited (the “Company”), I am pleased to present the results of the Company and its subsidiaries (the “Group” or “Ming Hing”) for the year ended 31 March 2014. During the year under review, Ming Hing continued to actively seek business opportunities for its waterworks business by tendering for government projects.

 

FINANCIAL HIGHLIGHTS
For the year ended 31 March 2014, the Group recorded revenue of HK$806.2 million, representing a decrease of 2.8% over last year (2013: HK$829.7 million). Gross profit increased by 63.0% to HK$50.2 million (2013: HK$30.8 million)

 

BUSINESS REVIEW
I) Waterworks business – Hong Kong Market
During the year under review, the Hong Kong market remained as the major revenue contributor to Ming Hing, generating HK$806.2 million (2013: HK$829.7 million), or nearly 99% (2013: 97%) of total revenue. The income from Hong Kong market comes from replacement and rehabilitation projects amounted to HK$454.3 million (56.4%), waterworks maintenance projects amounted to HK$259.6 million (32.0%) and slope maintenance projects amounted to HK$92.3 million (11.4%). During the year ended 31 March 2014, a new replacement and rehabilitation project (contract no 6/WSD/13) responsible for replacement and rehabilitation of water mains in Kwai Tsing, Tsuen Wan and Tuen Mun was obtained with contraction sum of about HK$126.9 million.

1. Projects On Hand
Water Mains Replacement and Rehabilitation Projects
Works on seven water mains replacement and rehabilitation projects that the Group won in the last five financial years have been commenced since 2009. Those projects will be completed by 2015, are valued at HK$3.4 billion in total. Project details are as follows:

  • Stage 3 – mains in East Kowloon (package A) (contract number: 7/WSD/08)
  • Stage 3 – mains on Hong Kong Island South and Outlying Islands (contract number: 18/WSD/08)
  • Stage 4, Phase 1 – mains in East Kowloon (contract number: 14/WSD/10)
  • Stage 4, Phase 1 - mains in Central & Western and Wan Chai Districts (contract 11/WSD/10)
  • Stage 4, Phase 2 – mains in East Kowloon (contract number: 13/WSD/11)
  • Stage 4, Phase 2 – mains in West Kowloon (contract number: 14/WSD/11)
  • Stage 4, Phase 1 – mains in Kwai Tsing, Tsuen Wan and Tuen Mun (contract 6/WSD/13)

Waterworks Maintenance Contracts
The Group also won one waterworks maintenance contracts from WSD in July 2012, which will be worth over HK$462 million in total upon completion by 2015. Works on the projects have been started on 1 September 2012. Project detail is as follows:

  • Term Contract For Waterworks District W – New Territories West (contract number: 1/WSD/12(W))

 

Landslip Preventive Measures Works Contracts
Ming Hing further possesses one Landslip preventive measures works contract that were won from the Water Supplies Department in 2009. The total value for the contract is approximately HK$150 million, with details as follows:

  • Preventive Maintenance Works, Upgrading Works and Associated Ground Investigation Works for WSD Slopes (contract number: 6/WSD/10)

Works of the contract has been commenced in 2010 and will be completed by 2015 respectively.

 

2. Improvement of technology to boost competitiveness
To strengthen the Group’s competitive advantages in bidding for government projects, Ming Hing secured a Compact Pipe Installer License with “Wavin”, the sole global supplier of compact pipes. The Group has applied the compact pipe method in a water mains replacement and rehabilitation project (contract number: 7/WSD/08) starting from last November. The trenchless technique has the advantages of minimizing impact on road traffic, trade and the general public, utilizing underground space fully as well as making use of the existing aged water mains alignment. With the help of the compact pipe method, the Group can implement the project in a safe, timely and cost-effective manner and at the same time, maintain the highest quality standard. The Group has undertaken a study to identify possible applications in waterworks maintenance projects. It is expected that by leveraging this advanced technology, the Group will be in a more advantageous position to bid for future projects.

 

3. Industry recognition
In recognition for its professionalism, Ming Hing has continued to receive awards from different Hong Kong Government departments during the year. They included the following:

  • Silver Prize in Caring Construction Site Award Scheme 2013 of Ming Hing's maintenance project of Term Contract for Waterworks, District W - New Territories West was presented Occupational Safety & Health Council
  • Silver Prize in Caring Construction Site Award Scheme 2013 of Ming Hing's Replacement and Rehabilitation of Water Mains, Stage 4 Phase 1 - Mains in Central & Western and Wan Chai Districts was presented Occupational Safety & Health Council
  • Bronze Prize Caring Construction Site Award Scheme 2013 of Ming Hing's Replacement and Rehabilitation of Water Mains, Stage 3 - Mains on Hong Kong Island South and Outlying Islands was presented Occupational Safety & Health Council
  • The second runner-up in Occupational Safety & Health Council Shield final in the Unions Group of the Occupational Safety & Health Quiz 2013. The territory-wide annual event was co-organised by Occupational Safety & Health Council and Labour Department
  • Silver Prize in the Renovation & Maintenance Works Category of Ming Hing's maintenance project of Term Contract for Waterworks, District W - New Territories West was presented Labour Department under the Construction Industry Safety Award Scheme 2012/2013
  • Meritorious Prize in the Safety Team Category of Ming Hing's maintenance project of Term Contract for Waterworks, District W - New Territories West was presented by Labour Department under the Construction Industry Safety Award Scheme 2012/2013
  • Considerate Contractors Site Award in the New Works Category of Ming Hing's Replacement and Rehabilitation of Water Mains, Stage 4 Phase 1 - Mains in East Kowloon was presented by Development Bureau of HKSAR
  • Silver Prize in Outstanding Metal Scaffolder 2013 presented by Occupational Safety & Health Council and Labour Department of HKSAR

 

PROSPECTS
Looking ahead, Ming Hing will continue to prudently operate the waterworks business, which generates steady income for the Group. As the Group one new waterworks maintenance contract in July 2012 which last for three years, and one water mains replacement and rehabilitation project in last financial year which last for two years, they will therefore continue to be steady sources of revenue in the coming financial year.

 

APPRECIATION
On behalf of the Board, I would like to take this opportunity to express my gratitude to the management and staff for their diligence and dedication over the past year. With a comprehensive strategy in place for enhancing efficiency, service quality and competitiveness, we look forward to maintaining steady growth, and delivering satisfactory returns for our shareholders.

 

YUEN Chow Ming
Chairman
July 2014