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HONG KONG, May 10, 2010 - (ACN Newswire) - Cardlink Technology Group Limited ("Cardlink" or together with its subsidiaries the "Group"; HK:8066) (proposing to change its name to "Pheonitron Holdings Limited" in English), a world-leading one-stop smart card solutions provider and a pioneer in the imported used automobile resources recycling business within China, has announced today its unaudited results for the first quarter ended 31 March 2010.
During the period under review, the Group recorded a revenue of approximately HK$34.4 million, a rise of 4.1% over the corresponding period last year. Gross profit was HK$8.9 million (2009 1Q: HK$11.4 million). Profit attributable to equity holders was approximately HK$0.3 million (2009 1Q: HK$2.6 million). Basic earnings per share were 0.05 HK cents.
Last year, the Group entered the business of scrapped automobile recycling business through its subsidiary Hota (USA) ("Hota"). As Hota's plant in Zhangjiagang, China is still under construction, the Group incurred losses from Hota amounting to HK$ 0.8 million during the period. However, the plant has already received preliminary approval for production from the Environmental Protection Department of Jiangsu Province, Provincial Development and Reform Commission, Nanjing Customs, Jiangsu Entry-Exit Inspection and Quarantine Bureau on 23 April and is expected to start mass production and contribute revenue to the Group in the second half of 2010.
Moreover, the Group has also secured the supply and demand side for its business via signed letters of intent with suppliers of used automobiles from Japan, United States and Europe and mainland customers of recovered metals.
Hota Group is the only foreign enterprise to set up a factory in Zhangjiagang for processing imported used automobiles and selling the metal and other materials derived from those automobiles. As the Group is optimistic about the business opportunity presented by the automobile recycling industry, it believes that Hota's 'green' business would be a promising new profit driver of the Group in the near future.
Regarding the Group's smart card business, in order to cope with market competition during the review period, the Group offered discount prices to customers to achieve greater sales volume. Combined with an increase in direct costs and a less favorable sales mix, the gross profit margin of the smart card business was adversely affected. To alleviate the impact from the market environment, the Group plans to continue to streamline its production and operations, optimise internal resources, enhance cash management and negotiate better terms with suppliers.
Operating expenses will also be more closely scrutinised to improve efficiency. Ms. Lily Wu, Chairman of Cardlink, said, "Looking forward, we will continue to develop the smart card solutions business steadily, while also developing our automobile recycling business through Hota and further diversifying our business, while making a contribution to resources conservation and environmental protection. We are confident that this strategic initiative will generate better returns to our shareholders."
Contact:
Strategic Financial Relations Limited
Heidi So
Tel: +852 2864 4826
Email: heidi.so@sprg.com.hk
Jover Wong
Tel: +852 2114 4955
Email: jover.wong@sprg.com.hk
Eric Liu
Tel: +852 2114 4901
Email: eric.liu@sprg.com.hk
Selina Lam
Tel: +852 2864 4847
Email: selina.lam@sprg.com.hk
Topic: Earnings
Source: Phoenitron Holdings Limited
Sectors: Daily Finance, Automotive
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From the Asia Corporate News Network
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