SINGAPORE (Aug 17): Hengxin Technology, the manufacturer of radio frequency (RF) coaxial cables for mobile communications in China, has announced interim earnings of RMB68.6 million ($14 million) for the 1H17 ended June, up 35.8% from RMB50.5 million in 1H16 on higher revenue.
Group revenue increased by 17.1% to RMB852.8 million for the half year from RMB728 million a year ago on higher revenue generated from its telecommunications equipment and accessories segment, which grew 21.9% to RMB227.9 million from RMB187 a year ago.
The spike in revenue from this segment offset the 16% lower revenue generated from the RF coaxial cable segment, which fell to RMB416.6 million in 1H17 from RMB496.2 million in 1H16.
During the half year, the group achieved an overall gross profit margin of 21.5% from 20% in the previous year, due largely to a moderate decrease in copper prices and the group’s process efficiencies over the period in review.
The group says it will continue to monitor production efficiencies to ensure optimal raw materials and labour utilisation, stringent selection of suppliers in tender biddings to keep costs to a minimum, coupled with efficient use of various resources to keep up with price pressure resulting from keen competition.
Looking ahead, Hengxin Technology expects to face challenges in 2H17, but is nonetheless confident of its new product lines of leaky cables, antennas, high temperature resistant cables and 4310 component products developed in earlier years which have entered positive territory, which the group believes would replace the gradual decline of its coaxial cable products.
Shares in Hengxin closed flat at 31 cents on Thursday.