Tongda Group profit up 18.1% to HK$102.12mn

The group maintains stable sales and profit growth amid global economic instability and aftermath of Japan earthquake.

Tongda Group Holdings Limited (“Tongda Group”) announced its interim results for the six months ended 30 June 2011.

The Group’s revenue continued to increase steadily, up by 23.1% to HK$1,279,880,000 (six months ended 30 June 2010: HK$1,039,473,000). Gross profit rose by 26.7% to HK$238,358,000 (six months ended 30 June 2010: HK$188,102,000), while profit attributable to owners of the Company climbed by 18.1% to HK$102,118,000 (six months ended 30 June 2010: HK$86,506,000). Basic earnings per share increased by 12.9% to 2.19 HK cents.

As at 30 June 2011, the Group had pledged deposit, restricted bank balance and cash and cash equivalent balances of approximately HK$186,400,000 (31 December 2010: HK$228,000,000).

The Board recommended the payment of an interim dividend of 0.7 HK cent per share for the six months ended 30 June 2011 (six months ended 30 June 2010: 0.6 HK cent per share).

Mr. Wang Ya Nan, Chairman and CEO of Tongda Group, said, “We are pleased that the Group achieved solid and continuous growth in sales, gross profit and net profit in the first half of 2011, despite the challenges posed by global economic instability and the aftermath of the earthquake in Japan. Our success was due to further optimisation of our product portfolio and implementation of effective cost control measures. We have also pragmatically advanced the development of our glass touch panels for smartphones and light guide plates for LED TVs during the period. We expect these high value-added products to broaden the Group’s income stream in the future.”

Looking ahead, the management remains optimistic about the Group’s prospects. Despite the unstable global economic environment and aftermath of Japan’s earthquake, the Group has strengthened cooperative ties with renowned international and Mainland brand-name customers who are expected to contribute to its sales growth. In addition, the Group will utilise its technical advantages in the manufacturing of notebook computer casings to expand into the manufacturing of casings and fittings for other personal digital and consumer electronic products, such as tablet PCs. As well, the Group plans to increase the gross profit margin of its businesses by continuously optimising its product portfolios. As consumers turn from LCD TVs to TVs with higher image quality, the Group will more actively expand into the TV market in China and expects to see a substantial increase of shipments of LED TV light guide plates in the second half of 2011.

With respect to the electrical appliances business, the Group firmly believes that it will sustain the rapid development of its electrical appliance business by developing fashionable, innovative, environmentally friendly and efficient high-end products with state-of-the-art design. This business development approach is to be supported by actively strengthening our collaboration with strategic partners, and combining a sound business and profit generating model. Owing to the close proximity of the Group’s plant in Changshu City, Jiangsu, China, to the manufacturing base of internationally renowned electrical appliance brands, the Group is planning to commence manufacturing of casings for electrical appliances there in the second half of the year in order to forge closer ties with its customers.

In view of the rising demand for glass touch panels for smartphones driven by a fast growing market, the Group expects orders to increase gradually. The Group will allocate more resources and expand its production capacity to meet vast market demand. The production target for glass touch panels for 2011 remains at 12.5 million units per annum, according to a Tongda Group report.

Mr. Wang concluded, “As an industry pioneer currently manufacturing the exterior covers of handsets and handling precise multi-layered designs, we will further strengthen our IML and IMD printing technology in order to enhance our pricing power, and ultimately our competitiveness. We will also nurture ties with more famous world-class brands, leveraging our close strategic relationships. Looking ahead, with clear strategies in place and the commitment to succeed, the management remains fully confident in the Group’s performance in the second half of 2011, and in the coming years.”