For Immediate Release
China Display Optoelectronics Technology Holdings Limited
Announces 2016 Annual Results
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Gross Profit Rises Sharply by approximately 50%
Proposed Final Dividend of HK$2 cents Per Share
Continue to Optimize Product Portfolio, Unleash the Value of Joint Venture,
Capture the Share in High-end Market
(21 March 2017, Hong Kong) China Display Optoelectronics Technology Holdings Limited (formerly known as TCL Display Technology Holdings Limited, "Ch Display Opt" or the "Group"; HKSE stock code: 334) is pleased to announce its results for the twelve months ended 31 December 2016 ("the Review Period").
During the Review Period, the Group recorded a revenue of approximately RMB3.68 billion while the total sales volume accounted for approximately 74.5 million, representing an increase of 64.0% and 27.7% year-on-year respectively; in addition, the Group's gross profit increased by 47.2% year-on-year to approximately RMB206 million. Meanwhile, the gross profit margin of the Group was 5.6% for the Review Period, representing a decrease of 0.6 percentage point compared to the same period last year. The decrease was mainly due to an escalation of upstream panel prices in the first half of 2016, and the situation has been relieved gradually during the second half of the year. Furthermore, driven by the improved product mix and the growth of sales volume, the Group managed to make a turnaround from loss to net profit of approximately RMB91.1 million as compared to the same period last year. The Board proposed a final dividend of HK$2 cents per share.
During the Review Period, the product sales of the Group performed well, compared to the same period last year, the revenue derived from China rose by 106.1% to approximately RMB2.28 billion; for the overseas market, the Group's revenue in South Korea increased to approximately RMB375 million, representing an increase of 421.5% year-on-year, and the growth was mainly fueled by the sales of a globally renowned South Korean consumer electronics brand.
During the Review Period, revenue and sales volume of the Group's laminated LCD modules accounted for approximately RMB2.35 billion and 29.1 million units respectively, representing a significant increase of 159.2% and 165.1% over the same period last year respectively. Its revenue contribution also increased to 63.8% from 40.4% in the Review Period. Revenue and sales volume of non-laminated LCD module products was approximately RMB1.33 billion and 45.4 million units respectively, down by 0.5% and 4.2% over the same period last year respectively. The decrease was due to the Group's adjustment of its product mix to focus on laminated products which generally have a higher unit selling price.
As the Group's fellow subsidiary, Wuhan China Star Optoelectronics Technology Co., Ltd. ("Wuhan CSOT"), formally launched the 6th generation production lines of LTPS display panel under the Project t3 in February 2016, the Group has been supplied with small batches of LTPS display panels which are required for LTPS LCD module production since the second quarter of 2016. The Group expects that the supply of LTPS display panels by Wuhan CSOT will be increased progressively in 2017, which will help the Group to further satisfy the increasing demand of LTPS LCD module, thereby grabbing the market share. In addition, in June 2016, the Group placed new shares and successfully raised net proceeds of approximately HK$157 million in which HK$150 million will be applied towards the establishment of Wuhan China Display Optoelectronics Technology Company Limited ("Joint Venture") with Wuhan CSOT, as funding for the expansion of the Joint Venture's automated production lines of LTPS LCD modules. The fund will inject fresh momentum into its future capital and business development. Meanwhile, to highlight the advantages brought by the Joint Venture and precisely reflect its business nature with a new corporate image, the Group officially changed its name from "TCL Display Technology Holdings Limited" to "China Display Optoelectronics Technology Holdings Limited" in January 2017.
Looking ahead, Mr. LI Jian, Chief Executive Officer of Ch Display Opt, expressed, "The global economic outlook remains uncertain while the growth in global sales of smartphones and tablets is slowing down, 2017 is set to be a year with challenges and opportunities. With the rising demand for high-end smart devices products, demand for high-end LTPS LCD modules will continue to grow. We established the Joint Venture with Wuhan CSOT to further expand our existing high-end LTPS LCD module production scale, aiming to seize the potential in high-end market to expand our market share," Mr. Li added, "along with the increasing demand, we forecast a continuous growth in the sales of laminated LCD module products and LTPS LCD module products in 2017. In order to enhance our core competitiveness, we have set in place appropriate measures and will proactively uphold the strategy for product R&D and product portfolio optimization. We hope to explore top-notch brand customers and further expand our market share in high-end product market, so as to generate higher profitability and value for the Group and its shareholders."
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About China Display Optoelectronics Technology (334.HK)
Headquartered in China, China Display Optoelectronics Technology Holdings Limited (HKSE stock code: 334) is one of the major providers of small-to-medium-sized display modules (<=10.1") in the region. Ch Display Opt engaged primarily in the research and development, manufacturing, sales and distribution of LCD modules mainly for handheld mobile devices on an ODM basis. Smartphone LCD module products of Ch Display Opt are welcomed by domestic and overseas manufacturers with sales volume ranking among the top.
For more information, please visit its website at www.tcldisplay.com.
21/03/2017 Dissemination of a Financial Press Release, transmitted by EQS Group.
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