TCL posts profit as sales soar

Robert Clark
27 Aug 2010
00:00

Handset vendor TCL Communications has returned to the black after sales – mostly to offshore developing markets – skyrocketed in the first half.

The mainland Chinese company boosted revenue 160% to HK$3.45 billion ($443m) after shipping 14.23 million devices, a 181% increase over last year.

It announced net earnings of HK$250 million ($32.1m), up from a HK$104 million loss in 2009. Gross margin was 21%, up six percentage points, although the average selling price fell from $34 to $31.

Exports accounted for 91% of shipments, with the company selling 6.9 million units in the Americas and 5 million in EMEA.

CEO Guo Aiping said the turnaround was a result of the economic recovery and was also “a validation of our sales strategy and product development efforts.”

“We have also worked hard to move up the value chain by selling more TCL and Alcatel-branded handsets and by coming up with original designs for products that we white-label,” he added.

“Our brand is just going to get more valuable in the future, and customers will associate us with cutting edge but competitively priced products.”

Guo said the TCL-Alcatel brand had been ranked by iSuppli among the top ten global brands in terms of handset shipments in the first quarter of 2010. TCL acquired the Alcatel handset business from the French vendor eight years ago.

TCL shares were down HK30 cents to HK4.35 in early trading on the Hong Kong exchange Friday.

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