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Public company info - Putian Communication Group Limited , 01720.HK
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Putian Communication Group Limited, 01720.HK - Company Profile
Chairman Wang Qiuping
Share Issued (share) 1,100,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Telecomm. & Networking Equipment
Corporate Profile Business Summary: The Group, comprising the Company and its subsidiaries, is principally engaged in production and sale of optical fiber cables, communication copper cables and structured cabling system products. Performance for the year: Total revenue slightly decreased by approximately 2.1% to approximately RMB768.3 million (2018: approximately RMB785.0 million). Gross profit decreased by approximately 6.2% to approximately RMB184.4 million (2018: approximately RMB196.5 million). Gross profit margin slightly decreased by approximately 1.0% to approximately 24.0% (2018: approximately 25.0%). Profit for the year attributable to owners of the Company decreased by approximately 21.4% to approximately RMB66.8 million (2018: approximately RMB85.0 million). Business Review The Group has recorded dissatisfied financial results for the Year. It recorded a total revenue of approximately RMB768.3 million which represented a slight decline of approximately 2.1% as compared with the one for the Last Year. The Group has realized a gross profit of approximately RMB184.4 million for the Year, which represented a decline of approximately 6.2% as compared to the one for the Last Year. Profit for the Year attributable to owners of the Company was approximately RMB66.8 million, decreased by approximately 21.4% as compared with the one for the Last Year. The decrease in revenue was mainly attributable to the decrease in sale of optical fiber cables by approximately 23.5% to approximately RMB241.9 million (the Last Year: approximately RMB316.2 million). The underperformance in the optical fiber cable business was alleviated by the good performance achieved in the structured cabling system products business. The sale of structured cabling system products increased by approximately 21.8% to approximately RMB217.1 million (the Last Year: approximately RMB178.2 million). Revenue generated from sale of communication copper cables increased by approximately 6.4% from approximately RMB290.6 million for the Last Year to approximately RMB309.3 million for the Year. In general, the growth rate of the communication cable industry in the Year has slowed down as compared with previous years. The main reason was that the 4G construction in China has nearly come to the end while the 5G construction is still in an experimental stage. The commercialization of 5G is yet to come. The communication cable industry in China is in a lean season. Demand shrank because of few new communication network expansions, which led to an oversupply of goods and exerting a downward pressure on prices. As a medium size player in the industry, the Group’s business has been adversely affected. The Group had a steady performance in the sale volume of the optical fiber cable for the Year as compared with the same of the Last Year. However, the drop in the market price of the optical fiber cables in the industry results in a diminution of the gross profit margin of the Group’s optical fiber cables business. Overall revenue derived from the optical fiber cables business decreased by 23.5% as compared with the same of the Last year. The Group has expanded its sale team to diversify its customer base and penetrated into the non-telecommunication operator market in the structured cabling system products. Such strategy has been proved to be successful with a growth of 21.8% in the revenue generated from the sale of structured cabling system products for the Year as compared with the same of the Last Year. The market share and brand awareness of the Group’s structured cabling system products in non-operator markets have steadily increased. The Group was awarded as one of the Top 10 structured cabling brands in the PRC by China Intelligent Building Magazine（《智能建築》雜誌）for 2019. The Group has been honored with this award every year since 2015. For communication copper cable business, the performance is steady in terms of the market price and sale volume. Prospects: On 6 June, 2019, the Ministry of Industry and Information Technology of China issued a 5G commercial license to China Mobile, China Unicom, China Telecom, China Radio and Television. The four major telecommunication operators will jointly invest billions of dollars in RMB in 5G network construction. Some studies have shown that China’s 5G Fronthaul Network will stimulate a demand of approximately 245 million fiber kilometers of optical fiber cables. The Standing Committee of the Political Bureau of the CPC Central Committee met on 4 March 2020 and announced to accelerate the progress of existing major projects and infrastructure constructions already clearly planned by the state, as well as new infrastructure projects such as 5G networks and data centers. As the shadow of the new coronary pneumonia epidemic subsides, the pace of infrastructure construction in the country will gradually resume. Major national development projects such as 5G network and data centers will be accelerated. In early 2020, China’s steady economy development plan was strongly affected by the coronavirus outbreak. Relevant reports indicate that China will continue to lead the development of 5G industries under the epidemic. Under this coronavirus outbreak, 5G with “large bandwidth, low latency, wide connection” characteristics played an important role in the epidemic prevention and control, which enhance the PRC government’ management efficiency and capacity. 5G remote diagnosis and treatment technology, 5G plus thermal imaging technology and 5G ultra-high definition live broadcast technology have proved the importance of 5G technology and the need for 5G network construction. 5G “new infrastructure” is one of the important driving forces of the “post-epidemic era” economic recovery. Optical fiber cables as an important part of 5G network construction, will ushered in the need for blowout. The Group will continue to maintain its good business relationship with the major telecommunication operators and keep participating actively in the major telecommunication operators’ large-scale bidding projects. Strengthened production capacity and overall competitiveness will help the Group secure more orders. The Group will remain committed to business diversification and continue to maintain a high-speed growth trend in the market of the nontelecommunication operators. In the 5G era, there will be numerous new “small operators” for vertical industries and new industries. The Group has set up 27 sales representatives in large and medium-sized cities across the country to achieve full coverage of all major provinces and cities in the country, and further expand the businesses in the non-telecommunication operator clients nationally. Optical fiber cables, communication copper cables and structured cabling system products are set as the three key business segments of the Group. In the meantime, the Group is going to expand its business into parallel industries, such as data centers, building intercom, smart home. Among which, the development of structured cabling system products is one of the Group’s most important strategies in the coming years. The Group has achieved promising results in the structured cabling system products business. Take it next, the Group aims to become No.1 brand in the non-telecommunication operators’ market. It will further expand its market share and brand in the 5G era and strive for excellence in product quality and service to provide customers with high quality and diversified supply of communications network support. In addition to actively structuring the market and diversifying its product lines, the Group will make unremitting efforts in research and development. To meet the requirements of ultra-high bandwidth, ultra-low latency and ultra-high reliability in the 5G era, the Group has set up a first-class research and development team and acquired technology from industry leaders. The Group has mastered the domestic advanced technology and obtained a number of invention patents. The Group will continuously focus on the research and development work and treat it as the primary impetus to the Group's business growth. The forthcoming period is full of challenges. The Group believes in the need to strengthen the foundation. When the demand arising from 5G releases, the communication cable industry is bound to usher in a new round of growth. The Group looks forward to the era of the Internet of Everything. By then, the Group will seize the opportunities of 5G era for a business growth.

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