2013-08-23 17:01:04 -
Futong Technology Development Holdings Limited ("Futong Technology" or the "Group", stock code: 465), a leading distributor of enterprise IT products in the PRC, reported a revenue growth of 6.8% to approximately RMB1,544.2 million during the six months ended 30 June 2013 "2013 1H"). Profit attributable to equity shareholders of the Company also increased by 16.1% to RMB17.5 million during the review period.
The increase in revenue was driven by the remarkable 68.0% increase in sales of Oracle products and 17.8% increase in sales of IBM software products. Gross profit rose by 10.3% to RMB120.6 million with gross profit margin improving to 7.8%. Basic earnings per share for 2013 1H were RMB 6 fen (2012 1H: RMB 5 fen).
Mr Chen Jian,
Chairman of Futong Technology, said, "I am delighted with the Group's positive business performance as evidenced by the steady revenue and profit growth during 2013 1H despite the slowdown in the PRC's economic growth. Dedicated to continuously strengthening its portfolio of products and services, Futong has signed an agreement with SAP, one of the global leaders in enterprise software and software-related services, during the period under review to act as its authorised distributor in the PRC. The collaboration represents added recognition of Futong's strong distribution capability from a major global player, and will help to expand its range of IT solutions to China's customers in their drive to improve operational efficiency."
Sales of IT Products
The Group maintained a strong relationship with IBM and this business segment remained the key revenue generator of the Group. Revenue from the distribution of IBM's hardware and software products, including enterprise servers, system storage products and middleware and which are often bundled with value-added services, increased by 1.1% to RMB835.2 million in 2013 1H. This was mainly attributable to the higher revenue from sales of IBM's software and related services as well as sales of IBM's enterprise servers, which recorded solid growth of 17.8% and 1.1% respectively when compared with the same period last year.
As the Group strived to diversify its product range to achieve a balanced healthy growth and minimise reliance on the sales derived from a single brand, the revenue contribution from sales of IBM's products to the Group's total revenue decreased to 54.1% from 57.1% in 2013 1H.
Sales of Oracle's products, which are mainly database management software and middleware for application servers, and related services increased significantly by 68% to around RMB183.6 million for 2013 1H, accounting for 11.9% of the Group's total revenue.
Revenue from the distribution of EMC's products and the provision of related value-added services including software development, business consulting and implementation services based on EMC storage virtualisation and business continuity solutions recorded an increase of 1.6% to approximately RMB109.4 million during the first half of 2013.
Revenue from sales of Apple's products amounted to RMB 212.6 million, representing an increase of 6.2% as compared to the same period in 2012.
Revenue from sales of other products and services amounted to approximately RMB101.8 million for 2013 1H (2012 1H: RMB103.3 million). These products, among others, include servers, storage and IT security solutions from Huawei, as well as sales of other IT accessories.
Provision of IT Services
As the Group has strived to strengthen its IT technical support service team aiming at further expanding its IT service capability in the PRC, the revenue contribution from this segment grew by 2.3% to RMB101.6 million in 2013 1H.
Looking ahead, the Group is stepping up efforts to enhance its market-leading position through extending its sales network and coverage, diversifying its product distribution portfolio, broadening its product sourcing network, and expanding its range of higher margin IT services in order to boost profits.
At the same time, Futong has been initiating collaboration with potential business partners with an aim to expand its market share in the PRC. It has recently established an associate in the PRC to conduct the distribution business of VMware products in virtualisation and cloud infrastructure solutions.
"In view of the long term growth prospects of the IT industry in the PRC driven by the increasing informatisation of the country's enterprises, the Group will continue to sharpen its competitive edge while enhancing the operational cost structure, with an aim to maximise the interest of the shareholders as a whole," Mr Chen concluded.
About Futong Technology Development Holdings Limited
Futong Technology is one of the leading distributors of enterprise IT products in the PRC. It is principally engaged in the provision of IT solutions and IT technical support services, as well as the distribution of enterprise IT products in the PRC. It distributes a variety of enterprise hardware and software products, including mainly enterprise servers, system storage products, software in association with servers and system storage products, and provides IT technical support services in association with the distribution of enterprise IT products. Since 2006, Futong Technology has been one of the top three authorized distributors of IBM's hardware and software products in the PRC.
For more details, please visit www.futong.com.hk
Source: Futong Technology Development Holdings Limited
Contact: Strategic Financial Relations Limited Brenda Chan +852 2864 4833 / 6108 6048 email@example.com
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Fax: +852 2804 2789 / 2527 1196 Website: www.sprg.com.hk
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