Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
C FIBER OPTIC
HKEx Stock Code : 03777 
 
Corporate Profile
Principally engaged in the business of production and sale of fiber optic patch cords and other accessories.

Business Review - For the year ended December 31, 2012

Fiber optic patch cord is one of the essential building blocks for fiber optic networks widely used in telecom, broadcast and television networks and specialized communications networks.

During 2012, the Group's revenue surged 18.9% to RMB1,494,223,000, mainly driven by increase of 26.1% in sales of fiber optic patch cords in the domestic market, while our export sales declined by 9.4%.

With lower gross margin caused by changes in sales mix, and increases in finance costs and statutory income tax rate, net profit for 2012 increased by 7.5% to RMB272,172,000.

Earnings per share for 2012 was RMB22.4 cents based on weighted average number of shares of 1,217,300,000, as compared to RMB24.2 cents for 2011 based on weighted average number of shares of 1,047,593,973.

During 2012, the Group generates RMB445,894,000 of cash flows from operating activities as compared to RMB328,517,000 in 2011.


Business Outlook - For the year ended December 31, 2012

The country's government has specifically reiterated “Broadband China” as a national strategy. The goal is to cover at least 250 million household broadband subscribers nationwide by the end of the “Twelve Five-Year Plan” and be able to provided 20M and 4M of broadband access bandwidth to urban and rural households. With urbanization new set as recent top priority for the country, the pace of implementing “Broadband China” will accelerate.

Towards the end of 2012, the Ministry of Industry and Information Technology issued two new regulations, namely the “Regulations Governing the Design of Fiber-to-the-Home (“FTTH”) Communication Devices in Residential Areas and Residential Buildings” (住宅區 和住宅建築內光纖到戶通信設備工程設計規範) and the “Regulations Governing the Construction and Acceptance of FTTH Communication Devices in Residential Areas and Residential Buildings” (住宅區和住宅建築內光纖到戶通信設備工程施工及驗收規範), which require all residential buildings to be completed after 1 April 2013 to equip with optical fiber access along with such utilities as water, electricity and gas. This is clearly a sign that the government is accelerating the fiber-to-the-home initiative nationwide. With estimate of nearly 100 million residential buildings to be completed in the next three years, the number of broadband access users is expected to reach 350 million by 2015, further strengthening the market potential of fiber optic patch cords.

With the stronger than ever demand for mobile internet access, mobile services operators continue to install more mobile base stations for their existing 3G networks and expand their capacity to ease the pressure on transmission bottleneck. Recently, the Ministry of Industry and Information Technology has taken the lead to announce the possibility of issuing 4G licenses to telecom operators in 2013 and the mobile operators also announced their plan to increase their capital expenditures on the 4G network. Since fiber optic patch cord is one of the essential components for mobile network and base stations, the Group is well position to ride on such new development.

Since the promulgation by the State Council on Tri-network convergence, demand for relevant equipment has risen annually. As the pilot runs in 54 cities is near completion, the relevant market demand will further expand once tri-network convergence deploys nationwide.

Being the largest manufacturer of fiber optic patch cord in China, the Group will continue to benefit under favorable government policies on “upgrade from copper wire to fiber optic network, further penetration of fiber to the home and tri-network convergence” as well as the growing popularity of mobile internet. According to an independent research report, market size of China's fiber optic patch cord will amount to RMB5.21 billion in 2013, an increase of 17.6% over 2012, and will further grow to RMB7.18 billion by 2015.

Currently the Group reached an designed annual capacity of 18 million sets of fiber optic patch cord and is transforming its production process to ensure ever-rising capacity to meet the growth opportunities in the coming year. In addition, capability to produce butterfly fiber optic cable products and solutions specifically developed for FTTH connection is in place. The Group will also step up its R&D efforts to launch various types of specialized fiber optic patch cords and specialized soft optical cables for non-telecommunication customers.

Riding on our core competitiveness, brand recognition and presence in the international markets over the years, the Group has established new sales channels for overseas markets other than Ireland and New Zealand. We have been working closely with new international partners and are expected to make shipments to new oversea markets in 2013. The Group's goal is to penetrate into the one country each year.

Source: China Fiber Optic (03777) Annual Results Announcement
Chairman Zhao Bing Issued Capital (shares) 1,217M
Par Value USD 0.001 Market Capitalisation (HKD) 1,339M
 
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