Mr Yang Long-san, Rowell, Chairman and Chief Executive Officer, PROVIEW said: "The first half saw a dramatic growth in flat-panel digital TV sales and we expect that flat-panel digital TVs will soon overtake LCD monitors as our most important strategic product. We continue to hold an optimistic view on the future development of flat-panel digital TV market."
According to research by Digitimes, the global demand for flat-panel digital TVs will grow at double-digit rates over the coming three years. For the six months ended December 31, 2007, flat-panel digital TV sales posted a 176% period-on-period increase to a record-breaking approximately HK$5.1 billion (2006: HK$1.8 billion), contributing about 46% (2006: 22%) of the Group's consolidated turnover. In order to strengthen its position in the global flat-panel digital TV market, the Group will continue to enhance its existing production facilities so as to stay ahead of the rapidly growing market.
With the demand for LCD monitor remaining strong, LCD monitors continued to provide the Group with stable and promising income. In the first half, LCD monitor sales amounted to approximately HK$5.6 billion (2006: HK$5.5 billion), contributing about 50% (2006: 65%) of the Group's consolidated turnover.
Meanwhile, the Group continued to sell CRT monitors to regions such as South America and Asia. In the first half, CRT monitor sales dropped by 58% period-on-period to approximately HK$410 million (2006: HK$976 million). PROVIEW foresees that the global market for CRT monitors will be further retrenched but with this segment accounting for a mere 4% of consolidated turnover, the Group does not expect the inevitable CRT monitor market decline to have a significant impact on overall performance.
Group gross profit margin decreased from 7.4% to 7.0% due to unfavorable selling price adjustment on end products. In the first half, the gross profit margin contributed by sales of flat-panel digital TVs, LCD monitors and CRT monitors was 7.5% (2006: 8.1%), 6.7% (2006: 7.4%) and 5.3% (2006: 6.1%) respectively.
The Group is dedicated to improving the profitability of its LCD monitor segment by refocusing on higher-margin sales orders. To further enhance margin, the Group has introduced innovative products such as VisBoardTM, a new-generation tablet monitor equipped with electromagnetic technology in addition to a handwriting-recognition function. It can be potentially used for a wide range of purposes, including word processing, presentations, and art and design, as well as gaming. VisBoardTM is now contributing to the Group with a profit margin much higher than for traditional LCD monitors. The Group expects that total shipments of VisBoardTM will gradually increase during 2008.
The Group's geographical market mix remains well managed and diversified. During the period, the Group continued to seek to expand geographical reach, in particular in emerging markets, including Eastern Europe, South America and Middle East.
Going forward, the Group will focus on strategy for flat-panel digital TVs towards achieving a larger market share, in order to gain market influence and economies of scale. According to a study issued by Display Search in August 2007, PROVIEW is now the third largest OEM flat-panel digital TV manufacturer in the world.
As regards LCD monitors, the Group is now focusing on product profitability as opposed to quantity growth. The Group has invested considerable resources in developing cutting-edge technology in integrated power supplies. The Group will also seek out opportunities in capturing profits from the manufacture and sale of components used for making display products, such as backlights and power supply components.
The renowned Taiwan-based business conglomerate, Tatung Group made an investment in Proview in October 2007. Group management believes that such an arrangement helps to lay down a platform for future cooperation as Tatung Group enjoys direct control over one of the world's leading panel suppliers, Chunghwa Picture Tubes Ltd. as well as a strong base in the home-appliance market. PROVIEW expects the alliance with Tatung Group to help secure panel supply and strengthen sales position.
As at December 31, 2007, the Group's cash and bank balances stood at approximately HK$0.9 billion (June 30, 2007: HK$1.5 billion). Inventories were reduced to approximately HK$2.7 billion (June 30, 2007: HK$2.9 billion). Inventory turnover days also decreased to 49 days (June 30, 2007: 60 days), due to planned reduction of inventory levels following the industry peak season, as well as efforts to standardize components and shorten supply chain.
Financial Highlights
| Six months ended December 31, | ||
| 2007 | 2006 | |
| HK$ '000 | HK$ '000 | |
| Turnover | 11,156,126 | 8,510,914 |
 LCD monitors |
||
| Units sold |
3.79 million units | 4.25 million units |
| Turnover |
5,563,366 | 5,536,001 |
| CRT monitors |
||
| Units sold |
0.75 million units | 1.28 million units |
| Turnover |
410,363 | 975,988 |
| TFT-LCD televisions |
||
| Units sold |
434,000 units | 118,000 units |
| Turnover |
1.65 million units | 0.43 million units |
| Profit before taxation | 95,090 | 128,638 |
| Net profit attributable to equity holders of the Company | 80,281 | 102,815 |
| Basic earnings per share | HK11.5 cents | HK15.9 cents |
About PROVIEW International
PROVIEW International Holdings Limited (HKEx: 334) is the world's leading display devices producer. The Group commands a global sales and distribution network covering 50 countries with strong leverage of its world-class manufacturing facilities in China, Taiwan and Brazil. For more information, please visit www.proview.com.