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| Thursday, 16 August 2012, 10:00 HKT/SGT | |
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Source: Tongda Group | |
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- Focus on High-margin Products Drives Net Profit Growth
- Revenue Increases By 9.2% to Approximately HK$1,390 million
- Net Profit Increases By 11.0% to Approximately HK$110 million
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HONG KONG, Aug 16, 2012 - (ACN Newswire) - Tongda Group Holdings Limited ("Tongda Group" or the "Group") (Stock Code: 698) announced its interim results for the six months ended 30 June 2012 (the "Period").
Despite facing headwinds including the global economic instability, a slowdown in China's economic growth and increasing labour costs in the first half of 2012, the Group still managed to maintain stable development and recorded growth in sales, gross profit and net earnings. During the Period, the Group's overall revenue was increased by approximately 9.2% to HK$1,397.9 million. As the Group focuses on developing high profit products, gross profit was increased by 29.6% to HK$308.9 million and overall gross profit margin rose to 22.1%. The profit attributable to owners of the Company was increased by 11.0% to HK$113.3 million. Through the implementation of sophisticated management measures to maintain stringent cost controls, as well as utilising its edge on core technology, net profit margin remained at approximately 8.1% (the corresponding period: 8.0%). Basic earnings per share increased to 2.42 HK cents.
The Board declared the payment of an interim dividend of 0.8 HK cent.
The Group maintained a healthy financial position. Its pledged deposit balances and cash and cash equivalents as at 30 June 2012 was approximately HK$301.5 million (2010: HK$311.2 million).
Mr. Wang Ya Nan, Chairman and CEO of Tongda Group, said, "As one of the world's leading supplier of high-precision components of consumer electronic products, Tongda Group continued to maintain its position as a preferred partner on decorative components for mainstream handsets, notebook computers and household electronic and electrical products thanks to its core technology of In-Mould Lamination ("IML"). Despite facing headwinds including the global economic instability, a slowdown in China's economic growth and increasing labor costs, by focusing on the development of high-margin products, implementation of sophisticated management practices and stringent cost controls, the Group still managed to maintain stable development and recorded growth in sales, gross profit and net earnings."
Business Review
The Group's electrical fittings are separated into three divisions, namely handsets, notebook computers and electrical appliances. During the Period, the overall revenue of the division was increased by 9.7% to approximately HK$1,146.9 million (the corresponding period: HK$1,045.3 million).
Handsets
Benefitting from the continuous development of the smartphone market, the handsets business has continuously been the main growth driver of the Group. The turnover from this segment amounted to HK$608.9 million, an increase of 34.3% from HK$453.4 million over the corresponding period. During the Period, sales of high value-added products increased significantly. These included glass and IML touch panels, NCVM casing and high-precision plastic embedded components of smartphones.
Notebook Computers
During the period, the revenue from the notebook computers division reached HK$247.3 million, an increase of 40.8% compared with HK$175.6 million of the corresponding period. The Group possesses various surface treatment technologies and the capability of handling different decorative materials including IML, IMD, metal materials and insert molding technology. This capability has attracted long term business from industry-leading customers such as Lenovo, Dell, HP, Toshiba, Asus, Acer, Quanta and Compal.
Electrical Appliances
The phasing out of Government subsidy policies including "Home Appliances Replacement Scheme" and "Home Appliances to the Countryside Scheme" and implementation of residential real estate property restrictions have dealt a serious blow in the sales growth of domestic white household appliances. The Group's electrical appliances recorded a turnover of HK$290.7 million, a decrease of 30.2% compared to HK$416.3 million in the corresponding period.
Prospects
The Group will continuously focus on providing casings and high-precision components for the three major products in the global consumer electronic products (handsets, notebook computers and electrical appliances). To ride the market trend, the Group will develop handset casings in the direction of ultra-thin and functional components. As metal surface processing will be the major trend for notebook computer casing and fitting, since last year the Group has developed a number of notebook computer casings of metallic-like materials and textures, such as brushed-metal, composite materials pressing texture and ultra-thin computer casing which have been exhibited at the Intel Developer Forum (IDF) 2012. In the future, the Group will devote particular efforts to promote the application of the core technology of IML to other computer-related products such as casings of portable hard disk drives and computer mice.
For the electrical appliances business, as energy-saving and environmentally friendly as well as intelligent and stylish products had become the development trend, the Group believed that the business can maintain stable growth. The Group will continuously advance the research on the application of new technologies and materials, providing customers with cost-effective components which are both decorative and functional. At the same time, it will carefully evaluate diversified products to further enhance the customer base of the electrical appliances business.
Mr Wang concluded, "The Group has always emphasized and supported technology enhancement and innovation, as well as dedication to research and development and the application of new technology, materials and techniques. Through constant technological innovation and a combination of integrated techniques to add value to its products, and its ability to respond quickly to changes, the Group will proudly provide customers with a one-stop solution and service aimed at achieving sustainable growth. The Group also intends to adhere to the principle of prudent financial management while actively consolidating its operational advantages, in order to continuously strengthen its business foundation and drive the stable and continuous growth of the Group in the tough market environment."
Contact:
Strategic Financial Relations Limited
Vicky Lee Tel: 2864 4834 Email: vicky.lee@sprg.com.hk
Angela Ng Tel: 2864 4855 Email: angela.ng@sprg.com.hk
Cassie Ng Tel: 2864 4864 Email: cassie.ng@sprg.com.hk
Fax: 2527 1196
Topic: Press release summary
Source: Tongda Group
Sectors: Electronics, Daily Finance, IT Individual, Daily News
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