TONLY ELECTRONICS HOLDINGS LIMITED
(Stock Code：01249)
Tonly Electronics' Profit for 2015 Increased by 3.9% to HK$167.6 Million
Gross Profit Margin Rises to 12.5%
Final Dividend per Share of HK25 Cents
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Achieve Innovation and Internet Product Transformation to Enhance Profitability
(29 February 2016, Hong Kong) Tonly Electronics Holdings Limited ("Tonly Electronics" or "the Group"; SEHK stock code: 01249) today announced its annual results for the year ended 31 December 2015.
In the face of economic slowdown and downturn pressures in the global economy, the Group's turnover during the year under review recorded a decline of 10.4% yoy to approximately HK$4,857.2 million. However, owing to the Group's diversified products portfolio and core strengths brought by its completive industrial platform, the Group's profit for the year achieved steady growth. Gross profit margin rose to 12.5%, operating profit slightly increased to approximately HK$192.7 million. Profit attributable to owners of the parent grew by 11.1%1 yoy to approximately HK$166.5 million while net profit margin was 3.4%. The earnings per share is HK67.53 cents. The Board of Directors recommends a final dividend of HK25 cents per share for the year ended 31 December 2015.
During the year under review, sales of the Group's audio products achieved satisfactory growth. Segment revenue reached a record high of HK$2,294.6 million, representing an increase of 4.9% yoy. To respond to market trends, the Group actively developed more new audio products, and strengthened its R&D capabilities in electroacoustics technology to further develop single speaker and wireless speaker products and enhance overall product competitiveness.
With the growing popularity of tablet PCs and smartphones applications, the demand in the traditional DVD players market is shrinking. At the same time, due to the changes in customer's purchasing strategy, the related branded video disc player business recorded significant decline as a result. Revenue from the Group's video disc player decreased by 37.0% yoy to HK$1,302.5 million during the year under review.
The Group is able to continue to increase the sales of its media box products by strengthening software development capabilities, improving product design and cooperating with foreign and domestic internet and telecommunications companies to develop its mobile communications business. Revenue from the Group's media box business in the year rose by 33.3% yoy to HK$833.1 million. The overseas set top box ("STB") business, which started commercial shipments in September 2015, is expected to be one of the main revenue sources for the Group.
During the year under review, revenue from the sales of ABS-s products decreased by 33.9% yoy to HK$196.9 million, mainly due to the delay 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.
1As at 15 May 2014, the Group has completed the acquisition of the remaining 20% interest in the subsidiary, Tonly Electronics Ltd, resulting in an increase of profit attributable to owners of the Parent for 2015.
In terms of production and supply chain management, the Group is continuously committed to enhancing its human resources system, increasing the proportion of automated equipment and adjusting the location and layout of its plant to boost overall efficiency. On top of that, the Group has successfully implemented smart warehouse logistics management based on an industrial intelligence system, to closely integrate all aspects of supply chain, production and logistics, in order to lay a solid foundation for Industry 4.0. In June 2015, through business reorganisation and capital reduction, the Group consolidated the moulding and plastic parts manufacturing business of Guangdong Regency Optics-Electron Corp into the Group. The Group also combined the entire production process with its upstream operations to achieve synergy and reduce production costs. This allowed the Group to realise vertical integration and development of the plastic moulding business.
The Group commits itself to product development and innovation, with substantial annual investment in R&D above that of the average industry level. During the year under review, the Group's R&D expenses were approximately HK$188.3 million, representing 3.9% of its total revenue. Also, since early on, the Group has stepped into the IOT market, with accumulated experience in technology, design and development of smart IOT products. Its development of smart IOT products series have also begun stabilised production.
Looking ahead into 2016, the Group will focus on development of its three major businesses of video products, OTT and media boxes, and IOT innovative business. At the same time, by virtue of its electroaccoustic capabilities and injection capacity, it will create an integrated operating platform encompassing "Manufacturing, Quality, Supply Chain and Procurement" capabilities. In addition, the Group continued to actively explore new contacts and customers, intensify the development of IOT products and other Internet-related products businesses, as well as open up overseas markets.
The Group expects that the amount of orders placed by a major customer, due to the customer's business restructuring, will continue to fall in 2016. In addition, the cooperation model between the Group and one of its other customers has changed, so sales revenue from the first half of 2016 is expected to be lower than the same period of 2015. However, with the Group's effort in developing competitive IOT products and other audio products and developing its overseas markets, the management strives to achieve gradual recovery in the Group's revenue in the second half of 2016.
The management of the Tonly Electronics stated, "The Group adheres to products innovation and is committed to strengthening the capacity in design and core technology development to transform and upgrade its products and broaden its customer base, thus driving new business growth. In order to grasp the golden opportunities for the cross-industry cooperation brought by rapid development of IOT market, the Group will actively enhance its product competitiveness and capability, especially innovations in electroacoustic capacity and related technologies. We will continue to invest in the IOT industry, integrate R&D and supply chain, provide quality products and services for brand enterprises in the industry and customers. The Group is strive to become a supplier of high-tech intelligent products with a competitive edge, in order to enhance long-term value and maximise returns for shareholders."
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About Tonly Electronics
Tonly Electronics Holdings Limited (stock code: 01249) as a high-tech smart products manufacturer with competitive advantages in the industry, is principally engaged in the research and development, manufacturing and sales of audio-visual products and wireless intelligent interconnectivity products. Tonly Electronics is also one of the ABS-s manufacturers under the programmes of "Hu Hu Tong" and "Cun Cun 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.
For further information, please contact:
Cornerstones Communications Ltd.
Sharis Siu / Mona Chow / Tina Shi / Sara Qian
T: (852) 2903 9292 / 2903 9289 / 2903 9283 / 2903 9282
E: tonly@cornerstonescom.com
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