Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
CENTRON TELECOM
HKEx Stock Code : 01155 
 
Corporate Profile
Principally engaged in the manufacture and sale of wireless telecommunications coverage system equipment and the provision of related engineering services, and the sale of digital television network coverage equipment and the provision of related engineering services.

Business Review - For the year ended December 31, 2012

Mobile Telecommunications Network Coverage Solution Business

In 2012, subject to influences of the general macro-economic condition and a cyclical industry, transformation of the traditional mobile coverage industry in terms of technology and structure was underway. 2012 has been a relative trough for the entire communications equipment industry. As price competition intensified among peers, our profit margins continued to be under pressure. And at the same time, telecommunication operators reduced their expenditures.

Against the backdrop of such a challenging environment, the Group on the one hand strived to maintain the existing capacity and number of active sites, on the other hand, confronting with changes in technology and structure of the industry, the Group sought to transform and direct more resources to support research and development, market expansion and other activities cautiously, with a view to develop mobile communications coverage products and network coverage solutions that command a higher profit and capture the future development trend.

In 2012, thanks to the initiatives and efforts taken by the Group, we have maintained the scale and market share of our business. However, due to the falling prices and increasing costs, fees and investment, profit of the Group inevitably dropped to a larger extent.

Digital Television Network Coverage Business

As expected, the Group's revenue from digital television network coverage business in 2012 shrank significantly compared with the previous year. Due to government policies and industry environment, there has been virtually no new project in 2012. Our revenue was mainly derived from the projects completed but not yet inspected in the previous year, and projects that we started in the previous year and completed pending inspection only in 2012. Despite the success we achieved in ship-borne and car-borne satellite digital television market due to our market expansion strategies, and the fact that we won the tenders for such operations in a number of provinces, the amount realised in the year was rather trivial and did not make up the loss. In 2012, provision for trade receivables was RMB36.2 million and impairment loss of inventory was RMB8.8 million. The management of the Company is taking a number of initiatives to improve the settlement situation of trade receivables.

Business Outlook - For the year ended December 31, 2012

Mobile Telecommunications Network Coverage Business

With mobile communications increasingly become a daily necessities of life, we believed that it will bring about continuous demand for network coverage and promote industry optimisation. At the same time, the Group will be presented with steady market demand. Leverage such opportunity, by virtue of the accumulated advantages in the industry and our R & D results and technical reserves in the past, the Group will ensure its current scale and market share through sales of new network equipment and signal distribution products, and multi-network coverage and integrated solutions with more advanced distribution and wider bandwidth. We will strive for better sales performance in mobile telecommunication business, and at the same time, try our best to keep the increasing expenditures and costs at a manageable level, so as to improve and enhance our profitability.

With the experience in the mobile telecommunications network coverage industry we accumulated over years, the Group has gathered many resources and advantages. The Group has been leveraging such advantages and resources, as well as our industrial alliance platform, external cooperation in research and development and our own research and development capacity, to commence the research and development of various advanced communication technologies as our future reserves. As such, we can respond quickly to the market whenever opportunities arise, and face the challenging environment ahead. At present, substantially all of the business and income are still derived from mobile telecommunications network coverage business. For this reason, though our priority will be given to maintain our operating income and profitability at the current level, the Group will also continue to direct more resources on the research and development of various advanced communication technologies as our future reserves.

Digital television network coverage business

Digital television network coverage business has attained a certain scale after years of construction. Quite a number of devices and networks are running in the network. However, uncertainty in future government policies is casting a significant level of uncertainty in the consolidation of operation model and relevant systems and is therefore bringing greater challenges to the industry.

In view of the current situation of the industry, the Group will take the following measures: 1. The Group will implement stringent control over our trade receivables, and will use every means (or to take relevant legal actions if necessary) to recover those amounts; 2. As long as we can ensure the recoverability of receivable for our new business, the Group will continue to take advantage of its leading role in ship-borne and car-borne satellite mobile digital television products to extend our market and capture a larger market share, so as to expand our leading edge and enjoy better economic benefits; 3. Enhance our internal management control to reduce costs.

Private Network in Digital Interphone Industry

Public network communication is principally used for the provision of communication services to the general public, and economic benefit is the prime focus of network operators. Unlike public network communication, private network communication is principally used for the provision of emergency communication services, mobilising system and daily communication services to government, public safety authorities, public utilities sector and industrial and commercial companies, as such, its prime focus is social efficiency. Private communication network emphasises on the manageability, reliability, efficiency and safety of communication. In order to ensure the terminals can adapt to different working environment, end-users attach great importance on the reliability of the terminals, and require special features such as waterproof, dustproof, shockproof and flameproof. With the growing public concern over public safety issues (such as earthquake and tsunami), the prospect of global wireless telecommunication market will continue to be promising.

The Ministry of Industry and Information Technology issued the “Notice of Ministry of Industry and Information Technology on the Plan and Usage Administration of 150MHz and 400MHz Interphone Frequency(工業和信息化部關於150MHz、400MHz頻段專用對講機頻率規劃和使用管理有關事宜的通知)”(Gongxinbu [2009] No. 666) on 12 December 2009, it states that starting from 1 January 2011, no approval will be granted for new analogue interphone model that utilizing band 136-167MHz and 403-423.5MHz (excluding public interphone band 409.75-409.9875MHz and amateur interphone band 144-146MHz), and for analogue interphone models that already have approvals, their approvals will not be renewed upon expiration. The digitalisation of the industry will enter into a practical stage in the next five years.

Our Group started research and development in preparation for the private network for digital interphone business, and the network is now under practical application testing. The Company will step up its research and development and lay a solid foundation for the commercial launch and marketing of our products.

Source: Centron Telecom (01155) Annual Results Announcement
Chairman Dai Guoliang Issued Capital (shares) 779M
Par Value HKD 0.1 Market Capitalisation (HKD) 608M
 
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