Handset sales and global recovery key revenue drivers to end-Sept

TCL Communication Technology Holdings Ltd, an electronics maker on the mainland, said Friday its net profit surged 13.4 times to HK$202 million in the third quarter compared with a year earlier.

The Hong Kong-listed company also said it plans to launch its first Android-based 7-inch tablet PC and 16 new mobile phone models in the fourth quarter.

The company said its business maintained an upward march in the first three quarters, helping the company recoup lost ground from last year. Net profit in the period stood at HK$452 million, a big swing from a net loss of HK$91 million a year ago.

"Helped by the global economic recovery, TCL Communication achieved great success in the first three quarters," Chairman Li Dongsheng told a press briefing for the company's quarterly results Friday.

Sales volume for handsets and accessories hit a new monthly record of 3.6 million units in September, bringing the nine-month total to 23.7 million units, up 1.55 times from a year ago. Sales volume in the third quarter rose 160 percent to 9.1 million units.

"Except in the first quarter, which has always been a sluggish season, the past few months have witnessed an encouraging uptrend of our business," said CEO George Guo.

Guo also made particular note of the progress the company has made in overseas markets.

In Europe, Africa and the Middle East, where the company recently rolled out its full-range Alcatel-brand handsets, sales volume rose 103 percent year-on-year to 8.1 million units during the first nine months.

Shipments to North and South America jumped 2.62 times year-on-year to 5.6 million units in the third quarter. Meanwhile, the company's sales volume in the region almost tripled in the first nine months compared with a year ago.

However, the home market was a less rosy story. Sales volume on the mainland was down 5 percent in the first nine months.

Despite its shrinking share of the mainland market, Guo remains confident that the company is on course to achieve its full-year sales target of over 33 million units on the strong growth momentum in its overseas markets.

However, sister company TCL Multimedia Technology Holdings Ltd, a mainland-based TV maker, on the same day reported a net loss of HK$991 million for the nine months ended September. The firm, which is also listed in Hong Kong, said that the loss was due to decreased sales volume and a declining gross profit margin.

LCD TV sales volume dropped 6.1 percent year-on-year to 5.19 million sets in the nine-month period. Lower-than-expected sales volume also led to a high inventory level, putting downward pressure on the company's gross profit margin, which slipped to a low of 7 percent in the third quarter.

Nevertheless, CEO Zhao Zhongyao said that the outlook for the company was positive, as the company had largely cleared its obsolete inventory stock by end-September. The company is hoping to achieve a gross profit margin close to an industry average of 15.5 percent in the fourth quarter.

China Daily

(HK Edition 10/30/2010 page3)