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Press Release -- March 25th, 2011
Source: Comba Telecom
Tags: Construction, Earnings, Equipment

Comba Announces 2010 Annual Results — Include Webcast —

Revenue and Net Profit Surged 17% and 28% Respectively

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Promoting Growth with Innovation Seizing Opportunities with Technology

Financial Highlights(Year ended 31 December)

HKD’000 2010 2009 Change
Revenue 5,191,358 4,439,991 +16.9%
Gross Profit 1,939,700 1,681,923 +15.3%
Profit attributable to shareholders 724,326 564,500 +28.3%
Basic earnings per share (HK cents) 55.47 44.70(restated) +24.1%
Final dividend per share (HK cents) 8.0 8.0 0%
Special dividend per share (HK cents) 4.0 4.0 0%
Bonus issue of shares (Interim) 1 for 10 1 for 10 0%
Bonus issue of shares (Year-end) 1 for 10 1 for 10 0%
Net asset value per share (HK dollars) 2.45 1.97(restated) +24.4%

(25 March 2011, Hong Kong) – Comba Telecom Systems Holdings Limited (“Comba” or “the Group”, Hong Kong stock code: 2342), a leading wireless enhancement solutions provider, announced today its audited annual results for the year ended 31 December 2010 (“the year under review”).

During the year, due to the remarkable increase in the revenue from the PRC mobile operators, the Group retained its strong growth momentum. Revenue surged 16.9% to HK$ 5,191 million while gross profit increased by 15.3% to HK$1,940 million. Profit attributable to shareholders increased by 28.3% to HK$724 million, mainly due to increase in revenues, economies of scale, and reduction in tax charges. Basic earnings per share were 55.47 HK cents. The Board of Directors recommended payment of a final dividend of 12 HK cents per share (2009: 12HK cents), of which 8 HK cents were ordinary dividend and 4 HK cents were special dividend. Together with the interim dividend of 6 HK cents per share, the total dividend for the full year is 18 HK cents per share (2009: 18 HK cents per share). The total pay-out ratio remained stable at 32.4%. The Group also declared a distribution of 1 bonus share for every 10 existing shares held by shareholders.

Mr Tony TL Fok, Chairman and President of Comba, said, “Driven by the global economic recovery in 2010, the development of the global telecommunications industry rallied. To tap this opportunity, Comba ramped up investments in product development and technology and fully capitalized on its technological strength to meet market demands. The Group deployed a series of innovative products and solutions and achieved satisfactory growth in sales and results. Leveraging its advanced products and solutions, the Group secured several milestone projects such as the Shanghai World Expo, Asian Games and high-speed train systems. The completion of these projects has demonstrated the exceptional quality of Comba’s products and services, thus winning the support of our customers around the world.”

The restructuring of China’s telecommunications industry and issuance of 3G licenses have fueled the growth in demand for 2G and 3G wireless network enhancement. Revenue generated from the PRC mobile operators increased by 18.1% to HK$4,401 million and accounted for 84.8% of the Group’s revenue. Revenue from China Mobile Group achieved substantial growth of 30.4%, amounting to HK$2,697 million. In addition, revenue from China Telecom Group surged 15.1% to HK$453 million. Revenue from China Unicom Group decreased slightly by 1.0% to HK$1,250 million. As the strategic partner of these major mobile operators, the Group has launched a series of innovative products to meet the needs of these operators and has managed to secure a majority share of orders from China Mobile Group for TD smart antennas.

During the year under review, the number of domestic mobile phone users grew rapidly and telecom operators continued to invest in the optimisation of their 2G and 3G networks, thereby driving a surge in product sales. Revenue from the wireless enhancement business increased by 24.9%, accounting for 33.1% of the Group’s revenue. The antenna and subsystem business continued to generate stable revenue to the group, and its revenue rose 0.7%, accounting for 27.6% of the Group’s revenue. Revenue from services, including consultation, commissioning, network optimisation, project management and after-sales maintenance services also soared by 39.4% and accounted for 31.5% of the Group’s total revenue. Due to the changing market environment in the Indian market in the first half of the year, the Group recorded a decrease of 13.3% in Wireless Access business, accounting for 7.8% of the Group’s revenue. The Group resumed exports to India in the fourth quarter of 2010.

With the gradual global economic recovery, the Group also performed well in the international markets. In 2010, revenue from international and core equipment manufacturers rose 6.7% to HK$691 million, accounting for 13.3% of the total revenue of the Group. During the year, the Group secured several network optimisation and wireless solution orders from leading overseas telecommunications operators while optimising the OEM and ODM business, thus raising the Group’s revenue from the international markets. In addition, the Group participated in a number of benchmark projects during the year, such as the ALMA project in Chile, a DAS solutions project in North America and an LTE trial in Latin America, reflecting the high recognition of the Group’s brand.

In view of the increased revenue and future business growth, the Group increased its R&D costs by 26.3% to HK$211 million, accounting to 4.1% of the total revenue (2009: 3.8%). The Group continued to expand its leading-edge R&D team and introduced numerous innovative products and solutions. During the year, the Group applied for over 680 patents. Phase 2 of the R&D center is currently under construction and is expected to commence operations at the end of 2011, thereby boosting the R&D capabilities of the Group.

Mr. Fok said, “Pursuant to the Twelfth Five Year Plan of the PRC, information, communication and technology industry is included as one of the seven strategic emerging industries, hence it is expected to ramp up investment in the telecommunications industry. Coupled with the construction of high-speed railway systems driving demand for telecommunications systems, we are optimistic about the future development. As the market leader, Comba will fully utilise domestic resources, consolidate its business in the Chinese market, as well as actively expanding its international sales network, especially in the emerging and potential markets, thus achieving higher market penetration.”

Mr. Fok concluded, “Looking ahead, despite the parallel development of 2G and 3G business, the Group is actively cooperating with operators in developing cutting-edge 4G products. The Group is already well along in developing future LTE technology and is preparing to launch the LTE products seizing future opportunities. The Group intends to optimise its strength while sharpening our R&D competitive edge and broadening our product base in order to capture a larger share of the market. We are aiming to become the world’s largest wireless communications enhancement supplier. “

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Click HERE to view the webcast

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