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Tuesday, 18 August 2015, 23:55 HKT/SGT
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Source: Tongda Group Holdings Limited
Tongda Group Announces 2015 Interim Results
Mid-To High-End Smart Phones Continue to Boost the Business Growth;
Turnover Increases by 37.1% to HK$2,881.2 Million;
Net Profit Rises by 76.1% to HK$294.2 Million

HONG KONG, Aug 18, 2015 - (ACN Newswire) - Tongda Group Holdings Limited ("Tongda Group" or the "Group") (Stock Code: 698) announced its unaudited interim results for the six months ended 30 June 2015 ("the Period").

As a world-leading one-stop solution provider of high-precision components for intelligent mobile terminal, during the Period, the Group benefited from the shift in trend by mid-to high- end handset brands in the PRC towards metallic and ultra-thin casing with large screen, resulting in turnover increased year-on-year by 37.1% to HK$ 2,881.2 million with gross profit up 40.5% to HK$ 677.6 million. During the Period, overall gross profit margin increased to 23.5%. Profit attributable to owners of the Company increased 76.1% to HK$294.2 million, and the overall net profit margin increased from 8.0% to 10.2%.

The Board has recommended the payment of an interim dividend of HK 1.6 cents per share (2014: HK 1.0 cent per share), representing a dividend payout ratio of 30%.
The Group has maintained a healthy financial position during the Period. Its pledged deposit balances and cash and cash equivalents as at 30 June 2015 were approximately HK$524.1 million (31 December 2014: HK$477.6 million).

Mr Wang Ya Nan, Chairman and CEO of Tongda Group, said, "With the rising popularity of mobile Internet, widely-used IoT has made it easier to integrate computers and handsets into daily use of consumer electronics. Consumers have become more demanding in the quality and specialty. As a solution provider with advanced technologies, dominant integrated capabilities and products with outstanding cost-performance ratio, the Group will remain fully focused on improvement of its product portfolio and pursuing further opportunities for development, in order to differentiate itself amidst the intensive industry consolidation and record strong performances in mid-to high- end smart phones."

Business Review
The Group's electrical fittings division, includes three business segments, namely handsets, electrical appliances and notebook computers. During the Period, total turnover increased by 47.3% to approximately HK$2,310.8 million, representing 80.2% of the total turnover of the Group.

Handsets
During the Period, boosted by surging orders from metal handset casing, total turnover increased from HK$958.1 million in the corresponding period last year by 83.3% to HK$1,755.9 million. It accounted for 60.9% of total turnover.

With escalating competition among handset market, demands in handset components become more stringent. Metal casings, with their outstanding mechanical capability and attractive texture, are now a staple component for mid-to-high-end handsets for this year. The Group applied Nano Molding Technology ("NMT") in the production of its metal casings to attach metal and plastic at Nano level. Production lead time is generally shorter than traditional uni-body metal casing with higher yield. The technology was well-recognised by customers and widely used in mid-to-high-end handset models during the Period. The Group also conducted R&D on technology for the treatment of metal middle frames, including Composite Die-casting technology. At the same time, it had actively enhanced the capacity of Computer Numerical Control ("CNC") and applied Metal Injection Molding ("MIM") in the production of metal precision components. The Group's core technology of In-Mold Lamination ("IML") and In-mold Transfer ("IMT") can be widely used in precision plastic casings. The Group is also able to produce made of glass and composite materials.

As a one-stop provider of handset casings, metal frames, middle frames and Laser Direct Structuring ("LDS") antenna, the Group rode on its overall comprehensive compatibility, products with outstanding cost-performance ratio and leading position in the industry to become one of the prominent domestic manufacturers of handsets casings and strategically concentrated on leading handset brands in China and fostering close cooperation with domestic and international brands, including Huawei, Xiaomi, Oppo, Vivo, Asus, ZTE, Lenovo, Coolpad and TCL, obtaining several high-end flagship handset projects. During the period, the Group also added Letv, Tecno and Tin no, to create extra stability to customer base.

Electrical Appliances
In the latest trend of Internet of Things (IoT), China's high-end intelligent electrical appliances came under spotlight in the market. During the Period, the electrical appliances business recorded increase in sales of 1.3% from HK$323.8 million in the corresponding period last year to HK$328.0 million. It accounted for 11.4% of total turnover. The Group has maintained close cooperation with both domestic and overseas home appliance customers, including Haier, Gree, Midea, Panasonic, Zojirushi, Electrolux and DYSON.

Notebook Computers
During the Period, revenue from notebook computer division decreased from HK$287.4 million by 21.1% to HK$226.9 million, accounting for 7.9% of total turnover. The Group obtained additional orders from major partners, such as Lenovo, for more product lines, but the business is still being affected by the slump in the notebook computers market.

Ironware Parts, Communications & Others
During the Period, sales revenue for ironware parts, communications and others accounted for 19.8% of total turnover. Over the years, the Group not only produced metal set top boxes casing, but also provided one-stop production services to customers of electrical appliance, products of which included aluminum parts and precision metal structures with different surface effects. Communication facilities and other business mainly comprises digital satellite TV receivers, plastic set top boxes, durable household goods and sports equipment. The Group is also entering into new markets such as the automotive interior decorations and had already obtained orders from domestic and foreign automotive brands for production.

Total Revenue Contribution of Product Segments as Compared to the Same Period Last Year as at 30 June, 2015
                                      2015        2014
Electrical Fittings Division          80.2%       74.7%
i.      Handsets                      60.9%       45.6%
ii.     Electrical Appliances         11.4%       15.4%
iii.    Notebook Computers            7.9%        13.7%
Ironware Parts Division               11.2%       14.9%
Communication Facilities 
and Other Business                    8.6%        10.4%
Prospects
Given the increasing penetration rate of metal casings for handsets in the world, the Group's metal casings using NMT technology have been widely adopted by our customers. Furthermore, the Group has successfully developed new technology for processing of metal middle frames. Particularly, the Composite Die-casting technology has further reduced the processing time of CNC and boosted the cost-performance ratio of products. It will facilitate the Group's expansion of the mid-to-high-end market and enhance its earnings. The Group will also strive to improve the yield rate and efficiency of metal and precision plastic casings. It will also seek to improve the overall comprehensive compatibility by applications of and research on new technologies, materials and craftsmanship

In the new era of IoT, appliance users are persistently looking for product upgrade, resulting in an increase in demand for efficient, energy-saving, environmental-friendly and exquisite intelligent appliances. The Group actively explores America market this year and commence partnerships with international brands like Whirlpool and General Electric. Moreover, the Group will cater for trends in notebook computer markets, and will actively secure various series of orders through providing ultra-thin casings with better textures. During the period, newly added customers in Communication Facilities Division and Other Business included Bugaboo (am infant pushchair brand), Carestream (a medical imaging system company) and Domino (a printer manufacturer). The Group is also exploring new markets of automotive interiors decorations, which is expected to be a major highlight of the Group's long-term strategic plan.

Mr. Wang concluded, "The Group will steadfastly pursue advances in technologies, and assign priority to R&D, market expansion and continuous innovations. The Group is as devoted as ever to technology innovation in order to reduce production costs and will enhance yield rate and machine utilisation rate through automated production processes to enlarge its market share in this highly competitive industry. We will continue to generate better returns for our shareholders and investors through our firm determination to grow our business based on our pragmatic operating principles."


About Tongda Group Holdings Limited

Tongda Group is the world's leading solutions provider of high-precision components used in smart mobile communication and consumer electronic products. The Group has been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 2000, under the Information Technology - IT Hardware category, and has been selected as a constituent stock in the Hang Seng Composite SmallCap Index, Hang Seng Broad Consumption Index, Hang Seng Global Composite Index and the MSCI Global Small Cap Indices - China Index. The Group garners the DHL/SCMP Hong Kong Business Awards 2015-Enterprise Award and has been selected to the Forbes Asia's 200 "Best Under A Billion" list in 2016. Mr. Wang Ya Nan, Chairman and CEO of the Group has been named the winner in the technology category of EY Entrepreneur of the Year China 2016.

Leveraging its leading In-Mold Lamination ("IML"), metal casing production and rubber parts business technology and first-tier customers in the PRC's robust consumer market, the Group has established a solid presence in the markets for handsets, electrical appliances and notebook computer casings and related products. The Group is dedicated to satisfying customers' needs through establishing global service networks in various regions, with strategically located production bases in Shishi city, Xiamen, Shanghai and Shenzhen, as well as R&D centres in Shanghai and Taiwan.


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
Angel Li     Tel:  2864 4859  Email: angelok.li@sprg.com.hk
Fax: 2527 1196
Website: www.sprg.com.hk



Aug 18, 2015 23:55 HKT/SGT
Source: Tongda Group Holdings Limited

Topic: Press release summary
Sectors: Daily Finance
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