2012 Annual Results Presentation. 14 March, 2013

Transcription

1 2012 Annual Results Presentation 14 March, 2013

2 Agenda Company Overview Results and Analysis Market Outlook Q&A 1

3 Part 1. Company Overview

4 Company Structure Overview MOBI Development Co., Ltd. (HKSE 0947) 100% RF subsystems R&D and production Antenna R&D and production Aesthetic antenna R&D and production 100% MOBI Antenna (Shenzhen) MOBI Technology (Xi An) Die-casting and CNC processing RF subsystems R&D and production Antenna R&D Terminal antenna R&D and production 100% MOBI Communication (Ji An) Basic station production Microwave antenna production RF feeder R&D and production 100% 5% MOBI Technology (Hong Kong) International trade and funding MOBI Indonesia (In Preparation) (Indonesia) 95% Engineer and technology service for Indonesia market 100% MOBI New material and Technology (Xi An) Electroplate 100% Shenzhen MOBI Communication 3 (Shenzhen) Communication System engineer and technology Service

5 RF Path Core System Microwave Transmission Base Station Coverage Extension Mobile Handset Cable Microwave Transmission Switching Center Fixed-line Telephone We are committed to provide front end products for mobile communication. Our business includes base station equipment construction and related coverage extension products. We are extremely professional in base station RF. 4

6 Company Business Structure of Mobile Communication Base Station Antenna 天线系统 System Tower Mounted Amplifier 电缆 Base station Subsystem Bias Tee 5

7 Company Business (Cont.) Indoor/Outdoor Coverage Extension Solution Aesthetic Antenna 6

8 Part 2. Results and Analysis

9 Results Overview for 2012 Sales Revenue (RMB million) Due to the downturn of the global economy, domestic and international operators postponed their procurement, especially in Europe market, which led to a decline of our sales revenue in 2012 yoy. With the procurement of China Mobile TD Phase 6 and China Unicom and establishment of China Mobile LTE, the domestic market is recovering in Meanwhile, the further expansion of the number of our overseas operators is helpful for our diversified and steady growth in the future. 8

10 2012 Key Financial Indicators (RMB 000) Change (%) Sales Revenue 798, , % Cost of sales 585, , % Gross Profit 212, , % Gross Profit Margin 26.6% 16.8% Net Profit 42,358-39, % Net Profit Margin 5.3% -5.7% The year of 2012 meets downturns of global economy and communication industry, which caused revenue decrease and resulted net profit loss. However, Mobi has speeded up R&D of new products and has a good operating cash flow. As of the end of December 2012, the Company recorded a cash balance of RMB 260 million, which made a sufficient preparation for our recovering growth in

11 2012 Statement of Cash Flow (RMB 000) Net Operating Cash Flow -104,971 19,821 Net Investing Cash Flow -65,238-46,546 Purchase of land 0-10,323 Purchase of plant and equipment -46,347-32,701 Net Financing activities Cash Flow 32,485-8,995 Net Cash Flow -137,724-35,720 Enhanced internal control of receivables, such as Wheat Stalks Gathering project, to gain a significant improve in our operating cash flow. Be more cautious in investment. Focused on investment on upstream processing sectors to strengthen vertical integration ability. Purchased an industrial land (11,180 m2 ) in Shenzhen. Manufacture and R&D buildings are now on construction. The current leasing of the factories will terminate in two years and will save rent for RMB 7 million per year. 10

12 Reasons of Downfall of the Industry The downturn of the global economy, caused procurement postpone of domestic and international operators and affected profit of equipment In 2012, the growth rate of the CAPEX of global manufacturers and operators are lower than The 4G network building has not reach its peak and could not bring a bouncing effect for the industry. The digitalization of the industry brings a great deal of challenges and competitions to traditional network operators. manufacturers. 11

13 Sales Network of 2012 North America: LTE becomes the investment highlight; Mobi s growth in new products (in research). Europe: 1.Due to the economic downturn, the demand reduced; 2.Telenor has entered the delivery period. The brand name of Mobi has increased significantly among multi-national operators. China : 1.Operators CAPEX recovery with higher proportion in 3G; 2.The Trial of TD-LTE speed up and the license is expected to release in Latin America: The great potential of developing coverage solution service. Africa: 1.The political instability of North Africa led to a decrease in demand; 2.The network building has a great potential in Central and South Africa with a steady growth. Asia-Pacific: 1.Recovery of Indian market; 2.Bulk sales in Thailand s 3G market; 3.Breakthrough in Japanese market. 12

14 Sales Structure of Strategic Customers in 2012 Sales of strategic customers 2011 V.S (RMB million) 3% 46% The biding of China Mobile TD Phase 5 and TD Phase 6 worked smoothly and the demand of Chinese network operators increased. We have stable partnership with ZTE. As their core supplier, we participated in many overseas turn-key projects as supplier. Affected by the global economy, the sales revenue has decreased. However, the products coverage has increased significantly and we are developing several high-end products for overseas customers. 13

15 Sales of Major Customers in 2012 Customer (RMB 000) 2011 Percentage 2012 Percentage Change ZTE 256, % 263, % 2.81% China Mobile 72, % 140, % 95.12% China Unicom 86, % 95, % 10.70% China Telecom 8, % 7, % % Nokia Siemens 126, % 41, % % Alcatel - Lucent 178, % 66, % % Japanese Market % 22, % New Thai Market % 23, % New Others 69, % 25, % % Total 798, % 687, % -13.8% The sales increase of Chinese market and direct overseas marketing were offset by the decrease demand of the international equipment manufacturers. The market share of Mobi s Chinese market will be rising in the next two years due to the development of 3G and TD-LTE. 14

16 Development of the Strategic Customers in 2012 Telenor is the sixth largest multi-national network operator among the world. Mobi has signed procurement framework agreement with Telenor in 2011 and become one of the three antenna suppliers for Telenor in three years. In 2012, the products trial went smooth and has bulk sales delivered to its Pakistan subsidiary. In 2013, there will be small group of products trial in its Hungarian and Malaysia subsidiaries. DKK is a well-known Japanese equipment manufacture. It has operator customers in both Japan and Asia. Mobi has passed DKK s test and received certification in The products has been used in mobile network construction in Japan. In 2012, the sales of DKK was approximately to RMB 22 million. In October 2012, telecom operators AIS obtained the WCDMA license during the 3G operators license auction in Thailand. Mobi has realized bulk sales to AIS since October As of the end of 2012, the sales of AIS was approximately to RMB 24 million. As of February 2013, Mobi has delivered products valued RMB 12 million. One of the major mobile network operators in Latin America required, as regulated by local laws, that the base station needs coverage extensive and aesthetic antenna solution. The expected procurement is over 20 million US dollars. Our trial solution has been approved by the client and has received the first batch of order. 15

17 Sales Structure of Products in 2012 Revenue by Year Revenue by Products in 2012 (RMB million) Due to the instability of the global economy, the delayed of procurement of the network operators affected the income of the equipment manufactures and led to the decrease in demand of products. The impact on RF subsystem is most obvious as the main products supplied to equipment manufactures. 16

18 Profit Margin in 2012 Gross Profit Margin & Net Profit Margin Outlook for 2013 Improve technology and optimize product structure. The sales of LTE products will increase significantly. Sales of Products with higher margin will grow faster: Harvest in overseas direct sales leads to faster growth in high end antennas and aesthetic antenna solutions. Strengthen cost control, including production vertical integration and relocation. Explore overseas engineering and services business. (e.g. MOBI Indonesia) Due to the economic downturn, the demand of European and American markets decreased which resulted revenue decline. One-off effect on drop of gross profit from business adjustment of equipment manufacture customers for clear some inventory products at the end of lifespan. 17

19 Expenses in 2012 (RMB 000) 2012 Change Reason R&D expense 47, % Increased input in R&D of LTE and multi-band/multisystem products Administrative Expense 76, % Increased cost control Selling expense 47, % Increased cost control; Decreased operating activities cause less transport expenses Finance Expense 1,005 Some bank borrowings 18

20 Application of Net Global Offering Proceeds Application of Net Global Offering Proceeds (RMB 000 ) Net Proceeds Applied in Listing Net Proceeds Applied in 2012 The balance of Net Proceeds Capacity Expansion 30% 163, ,200 0 Acquisition Reserves 45% 244, ,800 Investment in R&D 15% 81,600 81,600 0 Supplement of Working Capital 10% 54,400 54,400 0 Total Net Global Offering Proceeds 544, , ,800 Cash and bank balances (Up to the end of December,2012) 264,392 19

21 Part 3. Market Outlook

22 Industry Outlook:The Era of Mobile Internet 780 million In January 2013, China's mobile internet users reached 780 million. 360 million At the end of 2012, the number of smart phone users in China reached 360 million (80% yoy). In January 2013, it is the first time for 2G number of users in China to have a net decrease. 12 Times From the 3 rd quarter of 2011 to the 3 rd quarter of 2012, the global mobile data traffic has doubled. Verizon and AT&T have launched traffic-based business packages. GSA estimates that mobile data traffic will have a massive growth up to 12 times from 2012 to Source: Ministry of Industry and Information Technology of PRC and Internet 21

23 LTE:Global Business Acceleration LTE has become the fastest growing technology in mobile communication history. As of 10 th Jan. 2013, the latest report of GSA indicates that: 381 operators in 114 countries around the world will make investment on LTE. In 2012, there were 97 LTE networks newly increased around the world, the networks have reached to 144. In 2013, LTE networks will reach up to 234. FDD TDD Source: Internet 22

24 LTE Supply Chain The main equipment manufacturers are important channels of the LTE market The LTE networks from different countries currently are using turn-key method to purchase base station equipments. In 2013, China Mobile plans to build 200,000 TD-LTE base stations, a total of 40% share of the China Mobile TD-LTE are accounted by ZTE (23%), Alcatel - Lucent (13%) and Nokia (<10%). Source: Internet 23

25 LTE: Our Advantage Perfect Channel Leading Technology Enriched Experience Our long-term strategic partnership with the world's four major equipment manufacturers; Co-operating with the above customers in the TD-LTE projects and obtaining the main share. Our TD-LTE antenna and RF subsystem products are the earliest products used in bulk base station building in China and Japan; We are the only Chinese supplier which passed the FDD LTE products test of Alcatel-Lucent in North America; We could provide technologies to share LTE with GSM and/or WCDMA in one antenna. We have diversified customers who owns LTE products, including TDD and FDD; Among domestic competitors, we are the first company who realized the commercialize of LTE products. 24

26 2013: Our Other Opportunities As the recovering of the global economy, there will be a significant growth in the demand of telecommunication industry Technology upgrade, high-end demand increased 25

27 Outlook: Our Three-year Strategy Expand customers and upgrade technologies simultaneously Expand number of multi-national operators and enter their supplier short lists Develop technologies of LTE and multi-band/ multi-system products 00 MOBI s Customers And Product technology RF subsystems and TD-LTE antennas Multi-band/multi-system station antennas, 3G, FDD LTE antennas and aesthetic antennas 26

28 Outlook: Our Three-year Strategy (Cont.) Enlarge market share and research new products simultaneously Increase market regions, focus on Asia-Pacific, develop in Europe and get breakthroughs in North America Research and develop active antenna technologies and technical engineering services business 27

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30 Disclaimer This report is drafted and audited by MOBI Development Co., Ltd. ("Company"). The information contained in this report shall only be disclosed under the permission of relevant laws, regulations and rules and for the sole purpose of providing information and shall not constitute any advertisement. The material, comment and forecast (if any) contained in this report merely reflects Company's situation or opinion at the date of initial disclosure of this report. Company may revise the information contained in this report and suggest investors to independently pay attention to related updates or amendments. This report may contain some forward-looking statements. Such statements are the description, analyzing or prospect of Company employees with respect to Company or relating industries. Company makes no promise or guaranty that the contents of such statements will be consistent with Company or relating industries' future performance. The company owns the copyright of this report, without the written permission from the company, this report shall not be disclosed in any form, copy, publish, use or reference by any organization and individual. If the company consents with the use of reference, the material should be used within the area indicated by the written permission of the company and required to indicate the source and shall not violate the meaning of the report nor modify and amendments. 29