Comba Announces 2008 Annual Results


Financial Highlights (For the year ended 31 December):

HKD’000 2008 2007 Change
Revenue 2,525,895 1,768,418 +42.8%
Gross profit 946,034 681,257 +38.9%
Profit attributable to shareholders 227,512 191,619 +18.7%
Basic earnings per share (HK cents) 26.68 22.56 +18.3%
Dividend per share (HK cents) 7.00 6.00 +16.7%
Bonus issue of shares 1 for 10 N/A N/A
Net asset value per share (HK dollars) 2.33 1.99 +17.1%

(29 March 2009 – Hong Kong) –Comba Telecom Systems Holdings Limited (“Comba” or “the Group”, Hong Kong stock code: 2342), a leading wireless enhancement solutions provider, announced its annual results for the year ended 31 December 2008.

For the year ended 31 December 2008, the Group achieved robust growth in revenue from both PRC and overseas markets, which surged by 42.8% to HKD2,526 million compared to 2007. Gross profit recorded a year-on-year growth of 38.9% to HKD946 million. Profit attributable to shareholders increased by 18.7% against 2007 to HKD228 million. The Board of Directors recommended payment of a final dividend of 7 HK cents per ordinary share (2007: 6.00 HK cents) and one bonus share for every 10 existing shares held by shareholders for the year ended 31 December 2008.

Mr. Tony TL Fok, Comba’s Chairman and President, said, “In 2008, with continued efforts on technologies innovation, launching new products and solutions and strengthening clientele relationship, Comba achieved remarkable growth in its annual results. During the year, there were disasters of snowstorms and a 8 magnitude earthquake in Sichuan, in Southern China. In response to these disasters, the Group had efficiently matched up with telecom operators to make urgent repair of telecommunications equipments, ensuring the retrieval of mobile network within the shortest period of time in the affected area. Meanwhile, the Group grasped opportunities arising from the Olympic Games and delivered mobile network coverage solution for a national stadium. The Group also installed a wireless enhancement solution for China’s Beijing-Tianjin Intercity Rail. In addition, the Group has become the approved vendor of a number of renowned worldwide telecom operators, further solidifying our leading position in the global market.”

In 2008, revenue contributed from the PRC market (including sales to core equipment manufacturers) increased substantially and accounted for 88.0% of the Group’s revenue. The increment was mainly attributable to the increase of providing services and sales of equipment and solutions to China Mobile Group, China Unicom Group and others core equipment manufacturers. With the issuance of the 3G mobile licenses, the Ministry of Industry and Information of the PRC Government forecast the total amount of RMB400 billion of capital spending for 3G mobile network for the next three years, thus Comba stands to benefit from the move. During the year, China Mobile expanded its coverage of its TD-SCDMA commercial trial and revenue generated from TD-SCDMA increased significantly by 51.3%.

International sales increased significantly by 122.1% year-on-year to HKD303 million, representing 12.0% of the Group’s total revenue (2007: 7.7%). During the year, significant inroads were made in the Americas and Indian subcontinent markets with new 3G network rollouts and 2G network enhancement projects. As a result, a number of sales agreements were secured. In addition, the Group enhanced its recognition with major clients, gaining approved supplier status for world-renowned telecom operators such as Vodafone, Telefonica Group, AT&T, Reliance Communications and Telecom Italia Mobile. The Group’s strive for long term partnership with its customers in various global regions shall allow Comba to continue to expand its presence in the international market.

During the year, revenue contributed from the Group’s wireless enhancement business increased by 11.7% against 2007 and accounted for 39.6% of the Group’s revenue. Revenue generated from the antennas and subsystems business surged 70.7% year-on-yearly, accounting for 33.4% of the Group’s revenue and has become the second major source of the Group’s revenue. As for the performance of the wireless transmission business, its revenue increased by 182.0% as compared with 2007 and accounted for 5.2% of the Group’s total revenue. Revenue from services, including consultation, commissioning, network optimization, project management and after-sales maintenance services, also increased by a significant 65.7% and accounted for 21.8% of the Group’s total revenue.

With the announcement of telecommunications industry restructuring in May 2008 and issuance of the 3G mobile licenses in the PRC in January 2009, the three mobile operators have enhanced investments on wireless coverage systems, which could benefit the Group’s business development. Comba has secured certain market share in the PRC 3G wireless enhancement projects and will strive efforts to develop and upgrade 3G-related products. Comba expects 3G projects will be one of the major sources of revenue.

Mr. Fok said, “With the accelerated pace of rural expansion in the PRC, the pursuit of network coverage expansion and network of better quality, the demand for wireless enhancement will be strong and the Group will actively expand its market coverage as well as achieve higher market share. We will continue to develop potential emerging markets such as Middle East and Central and South America, further strengthen the cooperation with PRC core equipment manufacturers, aiming to strengthen the Group’s global presence. We will seize the opportunities brought about by the dual development of 2G and 3G in the global market, in order to strive for achieving solid revenue for the Group.”

“To cope with the financial crisis, we will be vigilant in monitoring changes in the market and adjust our development strategies accordingly. We are optimistic towards the future of the Group. With Comba’s solid business foundation, its leading position in the PRC and its extensive worldwide network, we believe it will have a promising future, and bring rewarding returns to shareholders.” Mr. Fok concluded.

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