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HONG KONG, Aug 29, 2010 - (ACN Newswire) - Centron Telecom International Holdings Limited ("Centron Telecom" or "the Group") (Stock Code: 1155), a specialist in R&D, production and sale of mobile telecommunication and mobile digital television network coverage products and network optimization solutions, announced its unaudited interim results for the six months ended 30 June 2010.
During the reporting period, revenue grew 18.9% to RMB670 million (2009 1H: RMB640 million). Gross profit increased to RMB163 million (2009 1H: RMB156 million). Net profit was RMB50.1 million (2009 1H: RMB83.36 million). Basic earnings per share were RMB6.51 cents (2009 1H: 10.85 cents).
Benefiting from the increased investment in the 2G & 3G network enhancement projects by the three major telecom operators, revenue generated from 2G and 3G networks was RMB664, accounting for 99.1% of the Group's revenue in the reporting period. China Mobile was the major customer of the Group accounting for 42.8% of its total sales, while China Unicom and China Telecom accounting for 27.1% and 25.1% respectively. Facing the keen competition in the 2G market and the ever-growing 3G market, the Group exercised skilful pricing tactic to deal with the pricing pressure to achieve profit growth. During the reporting period, gross profit margin was maintained at 24.3% while the net profit margin was adjusted 3.5pp downward, resulting in a 4.1% growth in gross profit.
The slight decrease in net profit was due to one-off employee share option non-cash expenses and increased R&D expenses. The purpose of increasing R&D expenses was to enhance the competitiveness of the Group's products in the long run and improve cost efficiency. Net profit was RMB63.8 million after excluding the said expenses.
Wireless Coverage Business
Following the official roll-out of 3G standards and the announcement of the three-network integration schedule in China, telecom operators will continue to speed up investment in wireless coverage enhancement in order to meet the strong market demand. Thus, the Group expects that the coverage enhancement business will continue to grow substantially. With a stronger demand is expected on the more profitable 3G business in the second half of the year, the profitability of the Group will be further enhanced.
Digital Terrestrial TV
Currently, Digital Terrestrial Multimedia Broadcast (DTMB) and China Multimedia Mobile Broadcasting (CMMB) are the two major broadcast transmission standards for digital terrestrial television (DTTV) in China. Centron Telecom set up its wholly owned subsidiary, Centron Communication System (Xiamen) Company Limited (Centron Xiamen) to develop the DTMB and CMMB wireless coverage enhancement business in 2008. The subsidiary has been actively involved in the development of CMMB trial network in China in the past 30 months.
The Chinese government has formally announced the three-network integration schedule in 2010. State Administration of Radio, Film, and Television and China Mobile Group have worked closely together and jointly launched the CMMB mobile TV service. According to market intelligence, over 845,000 CMMB-capable handsets were sold in China by March 2010. However, the indoor coverage of CMMB is unsatisfactory, intensive capital investment is necessary for the enhancement. The Group expects that more orders for CMMB coverage enhancement can be secured in the coming months. DTTV will eventually become another major driving force to fuel the growth of Centron Telecom.
Overseas Market
Centron Telecom is looking for more business opportunities in Southeast Asian countries. The Group targets to become a provider of a full range of telecom network enhancement products to overseas operators.
Antenna
On 25 August 2010, the Group entered into a strategic cooperation framework agreement with Xi'an Haitian Antenna Technology Holdings Company Limited ("Xi'an Haitian") to form a strategic alliance for future cooperation and business arrangements.
Under the agreement, Xi'an Haitian appointed Centron Telecom as their exclusive sales agent of base station antennas and TD-SCDMA antennas for the telecommunication operators in Fujian and Anhui provinces. Xi'an Haitian will gradually entrust the manufacture of its products to Centron Telecom and authorize the Group to manufacture and sell Xi'an Haitian's products. To further explore business opportunities in antenna products, Centron Telecom set up an antenna department and launched several satellite antenna products in 2010. Antenna products are expected to make significant contribution to the Group's earnings in the future.
Mr. Dai Guoliang, Chairman of Centron Telecom, said, "The strategic alliance with Xi'an Haitian marked a milestone in Centron Telecom's business development. Equipped with the world's largest antenna examination laboratory for commercial use, Xi'an Haitian is producing antenna products with international standards. By combining Centron Telecom's capital and marketing platform, the partnership will definitely enhance the capability of obtaining the bulk purchase tenders from telecommunication operators in 2011. According to the statistics from Beijing China Studies and China Business Economic Information Centre, the mobile smart antenna market is expected to reach RMB48.6 billion in 2015. We strongly believe that the return on antenna business can be significant."
"Riding on our leading position in the wireless coverage business, we will further develop DTTV's indoor coverage enhancement in the second half of the year. Meanwhile, we will continue to improve our R&D capability and upgrade the product quality, evaluate the sales strategies from time to time, and expand the sales scale. By taking these measures, we strive for a bigger market share for better earnings performance, and maximize returns to our shareholders."
Contact:
Strategic Financial Relations (China) Limited
Ms. Esther Lau
Tel: +852 2864 4845
Email: esther.lau@sprg.com.hk
Ms. Winnie Lau
Tel: +852 2864 4876
Email: winnie.lau@sprg.com.hk
Ms. Yannis Yip
Tel: +852 2114 4949
Email: yannis.yip@sprg.com.hk
Ms. Annie Lau
Tel: +852 2114 4941
Email: annie.lau@sprg.com.hk
Topic: Earnings
Source: Centron Telecom
Sectors: Media & Marketing, Daily Finance
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From the Asia Corporate News Network
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