omniture

Tonly Electronics 2015 Interim Profit for the Period Rises 6.3% to HK$87.8 Million

Gross Profit Margin Widens to 13.6%
Fully Implement Its "Transformation and Entrepreneurship" Strategy
Actively Develop Media Boxes and New Audio Products Businesses
Tonly Electronics Holdings Limited
2015-08-11 19:40 2774

HONG KONG, Aug. 11, 2015 /PRNewswire/ --

Results Highlights (For the Six Months Ended 30 June 2015)

  • Turnover decreased marginally by 2.9% year-on-year ("yoy") to approximately HK$2,309.7 million

Business segment

Sales Revenue
(HK$ million)  

Yoy change(%)

Audio products

1,007.0

+36.0

Video disc players

766.8

-19.6

Media box products

392.0

+0.7

Other products (mainly Advanced Broadcasting
System-Satellite ("ABS-s")

143.9

-51.3

  • Enhanced production efficiency yielded results. Gross profit margin widened by 1.5% points yoy to 13.6%.
  • Operating profit rose 1.4% yoy to approximately HK$98.4 million. Profit attributable to owners of the parent climbed 17.8% to approximately HK$85.4 million.
  • The Group joined hands with Qianhai Haofang to establish a venture capital fund to accelerate its rapid transformation, build a new ecosystem and increase competitiveness and profitability.
  • Established R&D capabilities of earphones, mass production is expected to commence in the second half of 2015.

Tonly Electronics Holdings Limited ("Tonly Electronics" or "the Group"; SEHK stock code: 01249) today announced its unaudited interim results for the six months ended 30 June 2015. 

Faced with the challenges of the unstable economic environment, the Group's turnover during the period under review recorded a slight decline of 2.9% yoy to approximately HK$2,309.7 million. Gross profit margin increased from 12.1% in the same period last year to 13.6%. Operating profit rose by 1.4% yoy to approximately HK$98.4 million, while profit attributable to owners of the parent grew by 17.8% yoy to approximately HK$85.4 million. Net profit margin was 3.8%.

In the first half of 2015, sales of audio products achieved encouraging growth of 36.0% yoy to HK$1,007.0 million, mainly attributable to the growing popularity of Internet and wireless technologies, as well as substantial market demand for new types of audio accessory products for smartphones and television sets.

With rapid developments in Internet technology, along with the growing popularity of tablet PCs and smartphones applications, the market for traditional DVD players is continuously diminishing. At the same time, due to the changes in customer's purchasing strategy, sales of the related branded video disc player business recorded significant decline as a result. Revenue from the Group's video disc player decreased by 19.6% yoy to HK$766.8 million in the first half of 2015.

Revenue from the Group's media box business in the first six months of 2015 rose 0.7% yoy to HK$392.0 million. By strengthening software development capabilities and improving product design, the Group was able to enhance the competitiveness of its products and significantly expand its client base. It has also proactively established cooperation relationships with foreign and domestic internet and telecommunications companies, contributing to modest growth in the media box business.

In the first half this year, revenue from ABS-s products amounted to HK$40.9 million, a decrease of 78.3% yoy, mainly due to the delayed in shipments of governmental projects. However, sales of ABS-s products are expected to benefit from the Central Government's gradual opening of the ABS-s retail market.

In terms of production and supply chain management, the Group is committed to enhancing its human resources system. It significantly increased the proportion of automated equipment and automated product testing processes, strengthened the stability of its skilled workers, as well as reorganised the location and layout of its production plant to boost labour and overall production efficiency. In addition, the Group has acquired a parcel of land next to its existing Huizhou plant, and has begun construction of a new plant. This will allow the Group to expand production capabilities, complement its supply chain management, and increase production efficiency.

Through business reorganisation and capital reduction, the Group proposed to consolidate the moulding and plastic parts manufacturing business of Guangdong Regency Optics-Electron Corp into the Group in June 2015. The Group also proposed to combine the entire production process with its upstream operations to reduce production costs and achieve synergy. On top of this, it took advantage of its global supply chain and strengthened the operational capability of its overseas supply chain with the aim of providing more competitive products for customers. It has established HTS and DVD production lines in its factory in Indonesia which procured some of the raw materials locally and successfully acquired new customers, thus boosting the shipments substantially during the year. To increase product competitiveness, the Group will enhance product quality and optimise product design, further invest in R&D to strengthen its innovation capabilities in electroacoustics and related technologies. During the first half of 2015, the Group's R&D expenses were approximately HK$100.7 million, representing 4.4% of its total revenue.

In April 2015, the Group partnered with Shenzhen Qianhai Haofang Keji Limited to form a venture capital fund (the "Fund"), targeting smart product manufacturers with high brand equity and growth potential, as well as companies engaging in e-commerce ecosystem or related businesses, to provide equity investment, investment advisory and investment management services. The initial investment of the Fund is approximately RMB60 to RMB100 million. This will enable the Group to enter new business areas and accelerate its rapid transformation, in order to build a new business ecosystem and enhance the Group's competitiveness and profitability.

Mr Yu Guang Hui, Chief Executive Officer of Tonly Electronics, stated "The growing popularisation of Internet and wireless technology applications have become a major trend, with associated new audio products prevailing in the mainstream market. The Group will continue to strengthen its development capabilities in product design and core technologies and adhere to focus on product innovation as its expansion strategy. In addition, we will continue to look for opportunities, both organically and through acquisitions, to expand into new business areas, diversify service offering and revenue stream. Through enhancing productivity, developing new technologies, diversifying product offerings and expanding into new businesses, our ultimate goal is to provide high quality product and services to its customers whilst maximising value for our shareholders."

The Group's revenue breakdown by product:



2015 1H

2014 1H

Change


(HK$'000)

(HK$'000)


Audio products




- Traditional audio products(1)

462,438

391,509

+18.1%

- New audio products(2)

544,610

349,167

+56.0%

Subtotal

1,007,048

740,676

+36.0%





Video disc players(3)

766,772

953,756

-19.6%





Media boxes(4)

391,951

389,381

+0.7%





Other businesses




- ABS-s products

40,887

188,213

-78.3%

- Components

75,966

59,840

+26.9%

- R&D income

27,089

47,730

-43.2%

Subtotal

143,942

295,783

-51.3%





Total

2,309,713

2,379,596

-2.9%

(1)

Mainly include HTS and Micro & Mini speakers

(2)

Mainly include wireless speakers, soundbars and audio docks

(3)

Mainly include DVD players and BD players

(4)

Mainly include OTT (over-the-top) Internet services and content set up box

About Tonly Electronics

Tonly Electronics Holdings Limited (stock code: 01249) is an internationally leading audio-visual ("AV") products manufacturer, and is principally engaged in the research and development, manufacturing and sales of audio-visual products and wireless intelligent interconnectivity products on an ODM basis. Tonly Electronics is also one of the ABS-s manufacturers under the programmes of "Hu Hu Tong" and "CunCun Tong" initiated by The State Administration of Radio, Film, and Television ("SARFT"). The company will establish the most competitive New ODM industry platform based on acoustic and wireless internet technology. Its ultimate controlling shareholder is TCL Corporation (a company listed on the Shenzhen Stock Exchange, Stock code 000100.SZ).

For more information, please visit its website at www.tonlyele.com.

Source: Tonly Electronics Holdings Limited
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