New audio products achieve remarkable sales performance
Accelerate business transformation to develop into smart home business
(18 August 2016, Hong Kong) 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 2016 (the period under review).
During the period under review, the Group's turnover amounted to approximately HK$1,754.5 million, dropped by 24.0% yoy. Gross profit decreased by 17.7% yoy to approximately HK$259.4 million, while gross profit margin widened from 13.6% in the same period last year to 14.8%. Operating profit fell by 13.3% yoy to approximately HK$85.3 million. Profit attributable to owners of the parent declined by 22.8% yoy to approximately HK$65.9 million.
With the growing popularity of wireless technology and demands for smart home devices, the market for new audio products is rapidly expanding. The Group has implemented an "innovative traction, wisdom transition" strategy in order to meet market needs. Apart from the successful development of new audio products, the Group is also committed to expanding its smart home business, aiming at diversification of products and expansion of market shares. New audio products recorded encouraging sales in Europe as well as the U.S. Although revenue of audio products segment decreased by 0.5% yoy to HK$1,001.9 million, the decline has narrowed down as compared to that of 1Q 2016. Profitability of audio products is expected to be further enhanced by optimising the allocation of resources. The Group made impressive strides in developing new customers for soundbar speaker products, which is expected to be delivered in the second half this year or the next, while bulk shipment of headphones is also expected in the second half of 2016.
Smart home business is one of the Group's major highlights in its future development, with four categories of products including smart audio video, smart security, smart energy management, smart health and fitness. Despite of its short-term development, smart home business has already brought revenue of approximately HK$8.1 million. Given its growing popularity, the Group will further expand its smart home business in the U.S. and other overseas markets, expecting it to become a major growth driver for the Group. It is also working on R&D to apply the use of superefficient networking technology into its smart home projects in order to fully expand the business.
During the period under review, the traditional video disc player market has been affected by the upgrading of network bandwidth, increased popularity of tablet computers and smartphones, resulting in severe pressure for the business. The Group will stringently control the investments on related products in order to focus its resources on other business segments with higher development potential. To capture the opportunities arising from the gradual opening of ABS-s market by the State Administration of Radio, Film, and Television, the Group further expanded its scale of ABS-s business which resulted in a turnover of approximately HK$184.2 million, representing a sharp increase of 350.4%. By developing into high-end set top box markets in Europe, India and Africa, ABS-s retail business will gradually develop into an important source of income for the Group.
In terms of production and supply chain management, apart from optimising human resources system, increasing automation of equipment and implementing smart warehouse logistics management systems, the Group is also expanding the production capacity of Huizhou production base. The project is expected to be completed and commerce operation in the fourth quarter this year, which will further expand its production lines and integrate its supply chain to enhance production efficiency. The Group has also vertically integrated the molding and plastic parts manufacturing and electroacoustic units of its subsidiaries to achieve synergy and reduce production costs.
Management of Tonly Electronics stated, "Facing the challenging operating environment, the Group will continue to strengthen its product innovation and development capabilities of core technologies to optimise product mix with diversified products that cater to market demands and consumer preferences. We will further invest and allocate more resources on R&D and focus on the development of smart home business, in order to capture the business opportunities in North America and the PRC. With the successful transformation of business and implementation of the "innovative traction, wisdom transition" strategy, we believe that turnover will gradually pick up in the second half of 2016 and we are confident in long term prospect our business."
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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. It is also devleoping into smart home business. Tonly Electronics is 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.
- ASIA TODAY Newswire http://www.AsiaToday.com