Monday, November 30, 2020
 
Columnist
Martin Hennecke
 
TRIGIANT
HKEx Stock Code : 01300 
 
Corporate Profile
Principally engaged in manufacture and sales of Radio Frequency (“RF”) coaxial cable series and related products for mobile telecommunications and telecommunications equipment.

Business Review - For the year ended December 31, 2012

The Group recorded strong growth in turnover which rose significantly by approximately 22.4% from approximately RMB1,822.7 million in 2011 to approximately RMB2,230.6 million in 2012. Profit attributable to the owners of the Company during the year increased by approximately 22.0% from approximately RMB206.8 million in 2011 to approximately RMB252.3 million in 2012. During the period under review, mobile communications infrastructure in the PRC grew steadily. Major telecommunications operators continued to invest in the establishment of 3G network and development of 4G network, thereby driving the demand for the Group's products.

Turnover of RF coaxial cable series, the Group's core products, grew by approximately 4.1% to approximately RMB1,735.1 million, accounting for approximately 77.8% of the Group's 2012 total turnover. During the period under review, the Group devoted to driving the sales of products with high specifications, which enjoyed higher margin. At the same time, the Group adopted a cost plus profit pricing model such that the gross profit margin of this product increased by approximately 0.7 percentage point to approximately 23.4% on a year-on-year basis.

Another product, namely flame-retardant flexible cable series, began to generate profit in 2012. During the period under review, such product successfully underwent the centralised purchase tender procedures of telecommunications operators and sales contracts have been secured with 中國聯合網絡通信有限公司 (“China Unicom”) and 中國電信集團公司 (“China Telecom”). As a result, turnover of this product rose significantly by approximately 738.5% to approximately RMB318.1 million, accounting for approximately 14.3% of the Group's 2012 total turnover. As a result of economies of scale achieved from increased sales volume and increase in sales proportion of products with high specifications, which enjoyed higher margin, the performance of flameretardant flexible cable series during the period under review was a turnaround and recorded a gross profit margin of approximately 24.4%.

Business Outlook - For the year ended December 31, 2012

With the speedy development of communications technology, mobile telephone users are demanding more diversified multi-media services for mobile communications instead of mere audio services. “Smart communications products” are therefore becoming increasingly popular. It is clearly stated in the Twelfth Five-Year Plan that a comprehensive 3G network is the key development goal of the PRC telecommunications industry. According to the statistics announced by the three major telecommunications operators in the PRC, as at 31 December 2012, the number of 3G users in the PRC increased substantially by approximately 83% on a year-on-year basis from approximately 127 million in 2011 to approximately 233 million.

Driven by the fast growing number of mobile telephone users, the three major telecommunications operators in the PRC have accelerated the development of their 3G network. In the meantime, as 4G/LTE licenses are expected to be issued in 2013, it is believed that it would trigger an extensive 4G network development. In 2012, China Mobile completed the construction of 20,000 4G/LTE base stations for its 4G/LTE network and carried out a large-scale trial in 15 cities including Beijing, Shanghai and Guangzhou. It is also reported that China Mobile intends to invest over RMB40 billion in 2013 in the construction of 200,000 4G/LTE base stations covering 100 cities in the PRC and over 500 million mobile telephone users.

The Group believes the above-mentioned 4G/LTE base station development wave and the need for indoor signal coverage system will exacerbate demand for the RF coaxial cable series products. The Group has formulated a new capacity expansion program in order to capture the opportunities that may arise from the fast growing market with a view to further increasing its market share, so that the Group can maintain its leading position in terms of market share in the RF coaxial cable industry in the PRC.

Whilst consolidating its market position in the PRC, the Group also set its eyes on overseas markets. Telecommunications segment in emerging economies such as Russia, India and Brazil are currently in a phase of exponential growth. According to the “Mobile Economy” report published by Global System for Mobile Communications Association (全球移動通信協會), in 2012, the aggregate mobile revenue from the four countries, namely, China, Russia, India and Brazil, amounted to US$250 billion, representing an increase of US$30 billion, or approximately 14%, from 2011, and accounted for over half of the mobile revenue in developing countries. Accordingly, the Group believes that it is the best time for it to tap into the above overseas markets and further expand its source of revenue. Presently, the Group's products have been used in Russia, Brazil and India telecommunication markets, marking a key step in its expansion into the overseas markets. In 2013, the Group will strive to expand our sales network, through strengthening its sales and marketing efforts, participating in more trade fairs and organising more marketing activities to explore sales opportunities in these potential new markets and promoting the Group's products to existing and potential customers, with a view to becoming a leading RF cable manufacturer in the global telecommunication market.

Source: Trigiant Group (01300) Annual Results Announcement
Chairman QIAN Lirong Issued Capital (shares) 1,000M
Par Value HKD 0.01 Market Capitalisation (HKD) 2,590M
 
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