During the year under review, the Group shipped more than 7.5 million units of LCD monitors and 363,000 units of flat digital TV sets respectively, contributing HK$10.9 billion and HK$1.7billion to the Group's consolidated turnover. Sales of CRT monitors also grew considerably to 4.8 million units or HK$3.6 billion. The Group now ranks the seventh and fourth respectively in terms of global sales of LCD and CRT display devices. It is expected that demand for the more traditional CRT monitors will continue to decline as LCD monitors become more popular. The Group will continue to adjust its product mix and deploy resources efficiently to cater for the changing demands of different markets. The Group was able to maintain the gross profit margin for LCD monitor sales at 7.3% due to more vertical integration for the LCD module being undertaken by the Group in-house. The gross profit margin on CRT monitor sales was lowered slightly to 6.2%. The Group's overall gross margin for the year was 7.2%.
Sales to North America, Western Europe and Asia accounted for about 36%, 26% and 30% (sales in the China region reached 25% of consolidated turnover) of Group net turnover respectively.
Mr Rowell Yang Long-san, Chairman and Chief Executive Officer, PROVIEW International said: "The period under review was challenging for the entire display manufacturing industry. Escalating production costs together with an increase in wages in the PRC, as well as volatility in LCD panel prices, all resulted in the need for a very forward-thinking business strategy. Nonetheless, leveraging Proview's18-year track record and business relationships in the display industry, we were able to overcome the year's challenges and emerge as a winner."
The rapid growth of the Group's flat-digital TV business has also driven a change in its overall business model, from that of a primarily monitor-oriented business, to the dual development of monitors and TVs. It is believed that revenues from both streams will drive further growth in earnings. With the Group's vertically integrated core technologies fully implemented, Proview looks forward to continually reducing overall operating costs and enhancing management quality and profitability.
DisplaySearch and other sources have projected global LCD monitor shipments to increase from 118 million units in 2006 to 164 million units in 2010. The projected global LCD TV shipments will also increase from 36.5 million units in 2006 to 77.8 million units in 2009, a growth of 113% over the period.
"Taking advantage of the Group's experience and success in LCD monitors, we are confident we can successfully create new opportunities in the LCD TV market. We will utilize a unified product mix and multiple IDs to satisfy the needs of our huge customer base," continued Mr Yang. "Additionally, we will leverage our competitiveness, strengthened by vertical integration, as well as our patent-protected technologies. Our full line of LCD TV products will range from large-screen formats from 26" to 46", as well as small-screen sets from 15" to 22" wide. We target to be one of the world's top ten LCD TV manufacturers."
As at June 30, 2006, the Group held cash and bank balances of approximately HK$1.7 billion. As a result of consistent efforts to lower the inventory risk, inventories decreased to around HK$1.9 billion (2005: HK$2.4 billion), with inventory turnover reduced to 47 days (2005: 79 days).
Financial Highlights
| Year ended June 30, | ||
| 2006 | 2005 | |
| HK$ '000 | HK$'000 (restated) | |
| Turnover | 16,177,812 | 12,143,348 |
 LCD monitors |
||
| Units sold |
7.5 million units | 4.3 million units |
| Turnover |
10,852,932 | 7,180,042 |
| CRT monitors |
||
| Units sold |
4.8 million units | 6.9 million units |
| Turnover |
3,594,102 | 4,121,914 |
| Flat panel televisions |
||
| Units sold |
363,000 units | 63,000 units |
| Turnover |
1,654,700 | 987,364 |
| Profit from operations | 381,933 | 184,539 |
| Net profit attributable to shareholders | 180,328 | 26,068 |
| Basic earnings per share | HK27.93 cents | HK4.05 cents |
| Interim dividend per share | HK2.5 cents | HK2.2 cents |
| Interim dividend per share | HK2.5 cents | Nil |
About PROVIEW International
PROVIEW International Holdings Limited (HKEx: 334) is a world top-five display devices producer owning globally recognized house brands including PROVIEW and EMC. The Group commands a global retail-sales and distribution network covering 50 countries with strong leverage of its world-class manufacturing facilities in China and Brazil. It has an annual production capacity of 4 million units of CRT monitors, 13 million LCD monitors and 2 million flat digital TVs. For more information, please visit www.proview.com.