Thursday, March 28, 2024
 
Columnist
Martin Hennecke
 
SANDMARTIN INTL
HKEx Stock Code : 00482 
 
Corporate Profile
Principally engaged in media entertainment platform related products; other multimedia products; public system for providing service of integration system of public program; and children wear.

Business Review - For the year ended June 30, 2012

Looking back into the past year, the Group recorded an unsatisfactory performance due to the severe impact of global economic environment and international unrest situation, in which the main factors are as follows:

(1) Middle East and North Africa markets

The Middle East and North Africa markets have all along been very important trading markets for the Group, representing a considerable proportion over the total operating revenue of the Group. During the first half year of 2011, the chaotic political situations and outbreaks of wars in Tunisia, Egypt and Libya and during the second half of year of 2011, the United States strengthened its economic sanction against Iran and the Arab league imposed economic sanction against Syria, their turbulent situations had seriously affected the economic and trading activities in those regions, which had, to a greater extent, also reduced the Group's turnover in the past year.

(2) European debt crisis

The European sovereign debt crisis, erupted in Greece, spread out from a single country sovereign debt crisis to the entire Eurozone debt crisis, is developing into a ˇ§Debt Stormˇ¨ which restricts the recovery of European economy and affects the global economic development. The continue deepening of the European debt crisis made the Europe confronting six major crises, which are prolonged market competitiveness crisis, financial crisis, European sovereign political crisis, European Union political crisis, banking crisis and short term market confidence crisis. The short term market confidence crisis is the resultants of the former five prolonged major crises. The European debt crisis had substantially affected both domestic and foreign trades of the European Union, and affected the economic growth of its major trade partners through the trade channels. The composite financial crisis intertwining by the Eurozone sovereign debt crisis and the banking risks has become a significant threat to the international financial stability. At present, the Eurozone countries are making multilateral cooperation and joint efforts to resolve the crises and get rid of the difficult situations, but it is still far from recovery. Under this intensifying European debt crisis, the Group's trade to the European Union had slowed down significantly. The continuous European debt crisis has brought instability to the global economy, and also affected the Group's capital investments in China market.

(3) Transformation from integrated device manufacturer to platform owner

During the past year, the Group was at its transitional transformation period from a design manufacturer to a platform owner. The enormous change in business model and vision will need to experience a certain period to nurture, and it requires continuous contributions and investments in manpower and resources.

Business Outlook - For the year ended June 30, 2012

(1) Geographical integration of research and development teams with third party technologies

With the continuous global development and expansion of the Group, the effective integration of the Group's research and development teams in different countries has become a crucial step for further development. The Group has merged its research and development teams in Germany and Spain and established the Europe research and development centre, which focuses on new technologies and new products development for the European market, so as to provide seamless technical support and service to the local market and eventually lead to the market development as a whole. The repositioning and integration of Europe research and development centre, secures the research and development centers in Taiwan and China to concentrate the development of operating platform for Middle East, North Africa and North America markets. It is expected that the substantial restructuring of the Group's research and development teams will quickly enhance the Group's overall research and development progress and capabilities, which will lead the markets better around the world and will provide technical supports for the better development of the Group.

Apart from the safeguard of the sustainable development of the Group's core technologies, the Group is actively working with third party laboratories for the technical alliance, which will enrich the Group's product portfolio and services and will accelerate the progress on the development of new technologies and new products. This will provide favourable conditions for the continuous growth of the Group's revenue.

(2) New opportunities under European debts crisis

With the continuous spreading of the European debt crisis, the Group is actively adjust and integrate its market-oriented product lines, and through the integration of important distributors in Europe, the Group will proactively layout and prepare the further development in the European market. It is expected that the Group will overturn from loss to profit in the European market for the fiscal year 2012 to 2013, and its operating revenue will also achieve a significant growth.

(3) Expectable high growth under strategic transformation

While the Group is experiencing a nurturing period of six months in product and market, it also continued to launch its own platform products in December 2011 and January 2012. Through active market strategies and agreements with distributors, it is expected that the pay television system operators in Middle East and the system operators in Nepal will be able to achieve a significant increase in users and subscribers, and sales of the set top boxes will account for 10% of the operating revenue of the Group.

After its transformation, the Group will not only be the designer and manufacturer of professional head-end equipment, transmission equipment, modulating equipment and terminal receiving equipment, but will also receive the program monthly subscription income, and thus formally enter into the system operator market. When the number of users reaches a considerable level, the monthly subscription income will also become an important operating revenue source of the Group. The Group will extend its system integration business to channel content, content subscription management systems and various value-added service systems, with the aim of bringing the business development of the Group into another new era.

Source: Sandmartin Int'l (00482) Annual Results Announcement
Chairman Hung Tsung Chin Issued Capital (shares) 832M
Par Value HKD 0.1 Market Capitalisation (HKD) 350M
 
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