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Monday, 15 August 2016, 22:08 HKT/SGT
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Source: Tongda Group Holdings Limited
Tongda Group Achieves Steady Growth in 2016 Interim Results
Turnover Rises by 12.4% to HK$3,238.8 Million;
Net Profit Increases by 29.2% to HK$380.1 Million

HONG KONG, Aug 15, 2016 - (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 2016.

As a world-leading one-stop solution provider of high-precision components for consumer electronic products, the Group mainly benefited from the increase in sales of metal handset casings, resulting in a 12.4% y-o-y increase in turnover to HK$ 3,238.8 million. Gross profit increased by 16.6% to HK$790.1 million, while profit attributable to owners of the Company rose by 29.2% to HK$380.1 million. Overall gross profit margin and net profit margin increased from 23.5% and 10.2% last year to 24.4% and 11.7% respectively. Earnings per share grew by 23.2% to HK6.63 cents.

The Board declared an interim dividend of HK2.0 cents (2015: HK1.6 cents) per share, representing a dividend payout ratio of 30%.

The Group has maintained its solid financial position. As at 30 June 2016, it has cash and cash equivalents and pledged deposits balance of HK$886.5 million (31 December 2015: HK$936.0 million).

Mr. Wang Ya Nan, Chairman and CEO of Tongda Group, said, "The global handset market has a new landscape. Three of the world's top five handset brands in the first half of the year were domestic brands, with indicators pointing to a continued increase of their market share, subsequently providing greater scope for the Group's growth. We expect the handset upgrade cycle will support the future growth momentum of the business, the Group will emphasize more on the one-stop solution of cost-effective design and extraordinarily featured metal casings in order to cope with the increasingly high expectations of consumers."

Business Review
The Group's Electrical Fitting Division consists of three business segments, namely handsets, electrical appliances and notebook computers. During the year under review, overall revenue increased by 13.4% to HK$2,619.3 million (2015: HK$2,310.8 million), accounting for 80.9% of total revenue. In addition, the Group also possesses an ironware parts division, communication facilities and other businesses.

Handsets
The products rapidly penetrated from the high-end handset market to the mid-range market segment. As its unit price was higher than precision plastic casings, turnover increased from HK$1,755.9 million in the corresponding period of last year by 19.1% to HK$2,090.5 million, accounting for 64.5% of total turnover.

Domestic handset brands in China are gradually emerging, the growth of the Group's major domestic handset customers, especially Huawei and OPPO, was far higher than their peers during the Period. To actively capture market shares, all brands pulled off all of their efforts by launching more stylish high-end exquisite handsets while focusing on advanced and cost-effective handsets, which are featured by extraordinary metal casings, for the mid-range market segment. The Group applied Nano Molding Technology ("NMT") as a one-stop solution to produce plastic-metal hybrid casings. Such casings were launched at an affordable price to cater for the demand of mid-range handset market segment, and therefore the handset shipment increased significantly during the Period. At the same time, the Group further expanded the capability of Computer Numerical Control ("CNC") machines during the Period and the metal Stamping/Forging technology that can shorten the CNC processing time. Composite Die-Casting technology is used in processing metal middle frames, while technologies including Metal Injection Molding ("MIM") are also applied in the production of metal precision components which together with other diverse treatment solutions and innovative technologies, full process capability and the establishment of the core competitive advantages, enable customers to be more focused on designing unique handsets.

The precision rubber parts developed by the Group last year has started to be delivered to international leading brands, which further stabilized its customer base. Precision rubber parts have excellent sealing, waterproof and insulating properties, which provide good protection to the electronic components in handsets. During the Period, the Group also developed Liquid Silicone Rubber (LSR) for the customer, which is used in various precision rubber parts in handsets to enhance the supply capacity of compatible components of the Group. The Group expects to provide different customers with one-stop supply of a wide variety of components, including precision rubber handset casings, metal back covers, metal middle frames, rubber parts and Laser Direct Structuring ("LDS") antennas, thereby enhancing its overall competitiveness.

Electrical Appliances
The electrical appliances business recorded an increase in sales of 7.3% from HK$328.0 million in the corresponding period of last year to HK$351.9 million, representing 10.9% of the total turnover. The Group's major customers included Haier, Gree, Midea, Panasonic, Zojirushi, Electrolux, General Electric, Whirlpool and DYSON. The performance of the business remained stable during the Period. The cross-border acquisition of overseas brand by domestic corporations will help the Group to explore new customers.

Notebook Computers
Revenue from notebook computers was HK$176.9 million, representing 5.5% of the total turnover. Major products of the operation include precision metal and plastic ultrabook and tablet casings with light, simple and stylish design.

Ironware Parts, Communication Facilities and Other Businesses
Revenue of the ironware parts division for the year was HK$196.4 million, which represented 6.1% of turnover. Revenue of the communication facilities business was HK$247.3 million, up 71.1% from HK$423.1 million last year, representing 13.0% of turnover.

In addition to the production of plastic set top boxes casings, durable household goods, digital satellite TV receivers and sports equipment, the automotive business also experienced a rapid expansion, and the Group has become a supplier of a bulk amount of automotive interior decorations to Ford, BYD and General Motors. In the coming one to two years, the business will carry out trial and mass production for other new customers. The Group can utilize the technologies and production capacity of electrical appliances, and the automotive business has a high entry barrier, which resulted in a stable amount of orders. A long-term momentum of the business is expected along with the continuous development of the domestic automotive market.

Percentage of total revenue by types of product for the year ended 30 June 2016 and a comparison with 2015 are as follows:
	                            2016	2015
Electrical Fittings Division       80.9%	80.2%
i. Handsets                        64.5%	60.9%
ii. Electrical Appliances          10.9%	11.4%
iii. Notebook Computers            5.5%	        7.9%
Ironware Parts Division            6.1%	        11.2%
Communication Facilities and 
Other Business                     13.0%	8.6%
Business Prospects
Leveraging handsets with outstanding cost-performance ratio, the brand awareness of domestic brands has continued to increase while metal casings have also become more popular. In a fast-changing market, the Group is keeping abreast of the market dynamics at all times by researching and mastering a range of new technologies, new materials and new craftsmanship techniques, especially the use of materials such as metals, glass, ceramics, precision plastics and composite materials, to make new breakthroughs in respect of the overall compatibility of antenna and waterproof parts.

The Group will also strive to open up the automotive interior decoration components market in China. In view of the explosive potential of new energy-driven automobiles, "Internet of Vehicles" and connected mobility, the Group believes that sales of localized joint venture brands and domestic brands will boom, and the demand for the Group's automotive interior decoration components in mid-range vehicles will increase, expanding the Group's customer base.

Mr. Wang concluded, "As a one-stop solution provider, the Group is confident about increasing its market share from its existing customers through its quality, reliable and highly cost-effective products as well as the Company's full processing capability, enabling it to benefit from the wave of handset upgrades in the future. The Group will also strive to tap the automotive interior decoration components market in China to broaden its customer base. In addition, the Group will continue its in-depth exploration of the latest technologies, its emphasis on device products and optimization of quality management. We will also actively monitor the latest products in the market and provide customers with value-added services while enhancing our overall competitiveness and strengthening corporate governance, in order to get ready for the opportunities and challenges in the future, as well as to create good return to the shareholders and investors."


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 15, 2016 22:08 HKT/SGT
Source: Tongda Group Holdings Limited

Topic: Press release summary
Sectors: Daily Finance, Daily News
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