HONG KONG, Feb. 27, 2015 /PRNewswire/ —

Significant sales growth in new audio and media box products

Further optimized product structure

Results Highlights:

  • For the year ended 31 December 2014, the Group’s turnover increased by 19.0% year-on-year ("yoy") to approximately HK$5,421.0 million, driven by the growing businesses of audio products and media boxes.
    • The sales revenue of video disc players reached approximately HK$2,067.3 million, decreased by 2.8% yoy;
    • The sales revenue of audio products reached approximately HK$2,188.1million, up 28.5% yoy;
    • The sales revenue of media box products reached approximately HK$625.1 million, up 3,911.0% yoy, and
    • The sales revenue of other products (mainly Advanced Broadcasting System-Satellite ("ABS-s") products) reached approximately HK$540.5 million, representing a decrease of 23.8% yoy.
  • Gross profit was approximately HK$666.4 million, increased 35.4% yoy,  gross profit margin widened to 12.3% from 10.8% of 2013. Operating profit rose by 19.9% yoy to approximately HK$192.6 million. Profit attributable to owners of the parent reached approximately HK$149.9 million, representing an increase of 40.5% yoy, which was mainly due to the completion of the Group’s acquisition of the remaining 20% equity of the subsidiary, Tonly Electronics Limited, on 15 May 2014. The Board of Directors proposed a final dividend of HK25.0 cents per share based on the number of shares as at 31 December 2014.
  • On 29 September 2014, the Company announced to raise not less than approximately HK$423,245,000, by way of rights issue of not less than 82,989,355 rights shares at the subscription price of HK$5.10 per rights share on the basis of one rights share for every two existing shares held on the record date of 29 October 2014 (the "Rights Issue"). The Rights Issue has been completed on 21 November 2014 and raised approximately HK$421,252,000 after the deduction of related expenses. 

Tonly Electronics Holdings Limited ("Tonly Electronics" or "the Group"; SEHK stock code: 01249) today announced its consolidated results for the year ended 31 December 2014.

Through expanding and optimizing customer portfolios as well as enhancing production efficiency, the Group achieved satisfactory growth in turnover and operating profit. For the year ended 31 December 2014, the Group recorded a turnover of approximately HK$5,421.0 million, up by 19.0 % yoy.  In 2014, gross profit grew by 35.4% yoy to approximately HK$666.4 million. Gross profit margin widened to 12.3% from 10.8% of 2013. Operating profit rose by 19.9% yoy to approximately HK$192.6 million. Profit attributable to owners of the parent reached approximately HK$149.9 million, representing an increase of 40.5% yoy, which was mainly due to the completion of the Group’s acquisition of the remaining 20% equity of the subsidiary, Tonly Electronics Limited, on 15 May 2014. Net profit margin was 3.0%. Basic earnings per share were 88.25 HK cents (For the year ended 31 December 2013: 76.44 HK cents).

On 29 September 2014, the Company announced to raise not less than approximately HK$423,245,000, by way of rights issue of not less than 82,989,355 rights shares at the subscription price of HK$5.10 per rights share on the basis of one rights share for every two existing shares held on the record date of 29 October 2014. The Rights Issue has been completed on 21 November 2014 and raised approximately HK$421,252,000 after the deduction of related expenses.

During the year under review, revenue from video disc player business decreased by 2.8% yoy to approximately HK$2,067.3 million, accounting for 38.1% of the Group’s turnover. The annual decline in  the Group’s video disc player sales was far below than that of the industry. This was mainly attributable to the gradual withdrawal of selected competitors. The Group is committed to accommodate closely with important clients’ marketing and product strategies to expand its market share and reinforce the leading position in the market.

The Group has always been actively stepping up research on wireless technology, power dissipation, new technologies and new materials. In the meantime, the Group actively researched into electroacoustics in order to enhance the overall competitiveness of its audio products. During the year under review, the audio product business achieved satisfactory sales performance with revenue up by 28.5% yoy to approximately HK$2,188.1 million from approximately HK$1,703.2 million of 2013, accounting for 40.4% of the Group’s turnover. In particular, sales of new types of audio products rose by 75.8% yoy to approximately HK$1,003.6 million.

To capitalize on the development of smart homes and Internet technologies, the Group teamed up with domestic and foreign Internet and telecommunication giants to jointly develop the media box business with the aim of enriching and expanding its product portfolio. During the year under review, the Group was qualified as a supplier of a renowned telecommunication equipment firm to produce media box products, and successfully established cooperation relationship with domestic internet companies. Revenue from the business segment grew by 3,911.0% to approximately HK$625.1 million for the year 2014. The Group sees a bright prospect in the development of this business segment and expects that the media box business will become an important component of its businesses.

During the year under review, some of the local governments postponed their tenders for ABS-s, leading to a 42.1% decline in sales of the Group’s ABS-s products to approximately HK$297.9 million. The Group expects that the central government’s gradual deregulation of the retail market for ABS-s products will boost the growth of the business segment.

For production and supply chain management, coping with the labour shortage in Mainland China, the Group is gradually enhancing its staffing system, adopting more automated equipment and automated product testing process which significantly enhanced the per capita productivity and mitigated the impact of rising labour cost. The Group relocated its factory to a new site in July 2013 during peak season. This affected the production efficiency until early 2014. With the persistent efforts of the management and staff members, the Group was able to restore the production efficiency to a normal level of the industry. In addition, the Group took advantage of its global supply chain and strengthened the operational capability of its overseas supply chain.

Mr. Yu Guang Hui, Chief Executive Officer of Tonly Electronics, said, "The popularization of the Internet and wireless technology gives rise to smart homes, and creates bright prospects for the development of the new type of audio and mediabox products. For the business of new types of audio products, the Group will continue to invest in R&D, strengthen its innovation capability in electroacoustics and the related technologies, and enhance the product quality and designs. For the media box business, the Group will continue to strengthen its cooperation with both domestic and overseas internet and telecommunication companies to foster business development. It also closely follows the trends in the industry’s technological development and adopts automated production facilities for its diverse products in order to maintain its competitiveness. Meanwhile, the Group will attempt to enter into other new business, expand its existing business and enlarge its income source through both organic expansion or acquisitions. In this respect, the Group has identified certain potential targets for acquisition and will continuously seek for suitable opportunities for expansion."

The sales of the Group by products are set forth as follows:

Year

2014

Year

2013

Change

(HK$’000)

(HK$’000)

Video disc players(1)

2,067,255

2,126,384

-2.8%

Audio products

– Traditional audio products(2)

1,184,503

1,132,500

+4.6%

– New types of audio products(3)

1,003,606

570,743

+75.8%

Subtotal

2,188,109

1,703,243

+28.5%

Media boxes(4)

625,113

15,585

+3,911.0%

Other businesses

– ABS-s products

297,873

514,398

-42.1%

– Components

183,001

144,171

+26.9%

– R&D income

59,656

50,494

+18.1%

Subtotal

540,530

709,063

-23.8%

Total

5,421,007

4,554,275

+19.0%

(1)Mainly include DVD players and BD players

(2)Mainly include HTS and Micro & Mini speakers

(3)Mainly include wireless speakers, soundbars and audio docks

(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 a global leading vertically-integrated manufacturing services provider in the audio-visual products. It is the largest video products manufacturer and the fourth largest HTS manufacturer in the world, and is principally engaged in the research and development, manufacturing and sales of audio-visual products (excluding TV sets) and media box products for international brands on an ODM basis. 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. Its ultimate controlling shareholder is TCL Corporation. For more information, please visit www.tonlyele.com .