VTech Holdings, winner of last year's DHL-SCMP Enterprise of the Year award has set itself two goals: promoting its own line and expanding in Asia. The group, which sells electronic educational toys, cordless telephones and computers, is the only Hong Kong-listed company with a second primary listing in London, apart from HSBC Holdings. For the year ended March 31, VTech chalked up an 88.9 per cent surge in net profits to US$32.5 million, while sales grew 9 per cent to $688 million. The group started in 1976 as a small manufacturer of video games. Its main revenue earner today is electronic educational toys which with 60, 40 and 50 per cent of the US, British and German markets respectively, accounts for 45 per cent of the group's sales. Much of the company's success came from promoting its own line under the VTech brand name rather than selling toys and computers under some of its other brands, VTech chairman Allan C Y Wong said. 'Since 1982, we have been cultivating the VTech brand name, but it is in the past three years that we have really been consolidating our products under our own name,' Mr Wong said. 'Now, 40 per cent of our educational toys are under our own brand name. The rest are sold to AT&T and Japanese firms and 80 per cent of our overall products are on our own line.' The group spends $12 million a year in the US and $3 million to $4 million in Europe promoting the VTech name, with both markets accounting for 85 per cent of VTech's annual revenues. For its other products, VTech is an original design manufacturer (ODM), meaning that unlike original equipment manufacturers that make up most of Hong Kong's producers, it designs the products before selling them to multinationals. While the group has long been promoting its products in Taiwan, Thailand, Singapore, Malaysia and Indonesia, and has been in Hong Kong all along, Asia makes up just 15 per cent of VTech's sales. 'But it is where our growth rate is highest,' Mr Wong said. 'We are planning on expanding in Southeast Asia and China, where we are developing Chinese-specific products for electronic toys in terms of mainland prices and language.' VTech's production facilities are in China although its headquarters, the base for its sales and research, is in Hong Kong. The group's research and development section has a staff of 700 engineers in the US, Canada, Britain, China and Hong Kong. This year, VTech has introduced a new generation of digital cordless telephones - the Tropez 900DX - and is working on more advanced toys and games. 'This is a very competitive market. That is why we spend $25 million a year on research and invest in new products which we sell at affordable prices,' Mr Wong said. 'Because of our research and development efforts, our failure rate is less than 10 per cent - that is very low for new products.'