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Public company info - TPV Technology Ltd. , 00903.HK
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TPV Technology Ltd., 00903.HK - Company Profile
Chairman HSUAN Jason
Share Issued (share) 2,346,000,000
Par Currency U.S. Dollar
Par Value 0.01
Industry IT Hardware
Corporate Profile Business Summary: The Group designs, manufactures and sells computer monitors and flat TV products. Performance for the year: The Group recorded a profit attributable to shareholders of US$21.9 million (2017: loss of US$50.6 million) Gross profit margin improved 100 basis point to 9.2% (2017: 8.2%) Business Review: Notwithstanding the prevailing market conditions, the Group continued to improve and strengthen its operations during the year under review, and achieved great results, reporting net profit attributable to shareholders of US$21.9 million for the year ended 31st December 2018 (2017: loss of US$50.6 million). This was as a result of an improvement in gross profit (“GP”) margin (2018: 9.2%, 2017: 8.2%) attributable to strategic adjustment to product mix, drop in the cost of key components, and savings on warranty costs, coupled with a strengthened operating structure. These results were achieved despite realizing slightly lower consolidated revenue of US$9.15 billion (2017: US$9.59 billion), the adverse impact of the collapse of some emerging market currencies, such as the Argentine peso, Turkish lira, and Brazilian real, on local operating performances, and incurring some exceptional one-off charges such as US$12.9 million following the application of HKAS 29: Financial Reporting in Hyperinflationary Economies for its investment in Argentina, US$25.2 million impairment losses on financial assets (doubtful debt) and US$20.6 million impairment for TV trademark and certain intangible assets for phone and tablet business. Geographically, Europe was the Group’s largest market, attributable to accelerating monitor shipments and higher average selling price (“ASP”) for TVs. Revenue from Europe recorded a 13.7% growth compared to the same period last year and accounted for 34.7% of the total (2017: 29.1%). Turnover from China, negatively affected by slow demand and stiff market competition, fell by 20.6% year-on-year to account for 23% of the consolidated revenue (2017: 27.7%), in line with North America which contributed 23.4% (2017: 24.6%). Sales in South America came down by 9.5 percent as a result of lower exchange rates, accounting for 8.2% (2017: 8.6%), and the rest of the world accounted for 10.7% of the Group’s total revenue (2017: 10%). TVs TV business segment continued to face strong challenges and keen competition, more prominently in China. The Group’s total shipments declined by 10.2% year-on-year to 15.1 million sets (2017: 16.8 million sets). Segment revenue also declined by 13.8% to US$3.65 billion (2017: US$4.23 billion) under a lower ASP of US$241.50 (2017: US$251.70), mainly as a reflection of the lower cost of panels during the year. Despite these, the segment’s GP margin improved to 11.5% compared with last year’s 7.9%, primarily attributable to strategically aligned product mix and optimised warranty costs. These were coupled with tighter cost controls, producing a significant improvement in segment performance, and an adjusted operating loss of US$50.9 million (2017: loss of US$195.1 million). The operating loss was inclusive of an additional US$9 million impairment charge for TV trademark and US$25.2 million provision that the Group has made for its receivables from its over-the-top TV customers in the PRC. Although the Group has now provided in full for most of these customers, management will continue to pursue payment for outstanding debts and is confident that some of these amounts may be recovered in the future. The performance of Philips TV in Europe was particularly encouraging in 2018. Although the volume shipped was approximately the same as the previous year, the change in the product mix which saw shipment of 50-inches and above TVs increase 60% year-on-year, underpinning the success of the Group’s strategy to focus on large screens. On the other hand, shipments to China were hit by macro-economic challenges and intense competition from some other brands, who have been reducing their prices significantly to increase their market share. As a result, total shipments to the China market declined by about 30% in the year. Furthermore, the ODM business came under pressure as the Group’s customers slowed their shipments in the face of stiff market competition. Despite this, the Group maintained its position as a reliable ODM TV manufacturer and raised its supply share for some of its customers. Moreover, the Group continued to diversify its customer base by adding new clients in different geographies. Monitors The Group shipped 46.1 million units of monitors during the year, representing an increase of about 5.4% over the same period last year, attributable to the strength of the Group’s ODM business in Europe and North America. Segment revenue also increased by 4.3% to US$5.08 billion (2017: US$4.87 billion) on a stable ASP of US$110.20 (2017: US$111.40). Size migration and changes in product mix helped to bolster selling prices as well as neutralise the effects of declining key component prices. The segment GP margin held up at 8.1% (2017: 8.3%) resulting in an adjusted OP amounting to US$184.1 million, representing about 8 percent increase over the previous year (2017: US$170.6 million). During the year, the Group earned accreditation from its long-term customers who are international top PC brands as a reliable supplier offering superb quality. It further solidified the Group’s leading position in the sector, helping us to gain additional market share. In 2018, the Group’s manufacturing volume accounted for 36.2% of global manufacturing volume (2017: 35%). Prospects: There were a few significant developments of the Group’s operation in the reviewing year. One was the completion of the Group’s new manufacturing base in Xianyang, in Shaanxi province in the PRC. The plant is located next to a 8.6G panel fab partly owned by China Electronics Corporation, and is designed to produce TVs of 50-inches and above, and has an annual capacity of 4 million sets. The Group continued to focus on automation and invested a total of around US$11 million to energise its monitor and TV production lines. For example, in the Fuqing factory, the manual insertion of PCB (“printed circuit board”) was integrated with SMT (“surface-mount technology”) production, removing the need for wave soldering. The production process was also streamlined, bringing greater efficiencies and keeping costs down. Furthermore, the Group reorganized the customer service structure in China, bringing greater resource efficiency without compromising on the service quality delivered to end customers. Three repair centres were closed, and partnerships were formed with reputable technical-support suppliers in strategic locations. Another key development was the addition of a new business for distributing Philips’ brand audio and video products worldwide starting from June 2018. The new trademark license agreement supplements the existing licensing arrangements related to TVs, mobile phones, tablets and monitors, enabling the Group to broaden its product portfolio and increase its competitiveness across all consumer electronics segments.

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