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Cell-phone distributor to grow despite fall in earnings

May Chan

Although severe competition is putting the squeeze on profit margins, mobile-phone distributor HKSC International Holdings plans to continue expanding, according to director Rockie Kwok.

The company's net profit fell 59.5 per cent in the April-September period last year, despite an 11 per cent rise in turnover. But despite falling profit margins, HKSC plans to open retail outlets in Jusco Department Stores' eight locations starting this weekend.

'No mobile-phone retail shops have covered this market area until now. I expect the eight stores to double our mobile-phone sales, which have been about HK$7 million per month,' Mr Kwok said.

Sales would be helped by demand for up-market handsets as the replacement cycle grows more frequent and as mobiles become more of a fashion item or personal accessory, he said.

He conceded it would be tough to maintain profitability in the face of cut-throat competition from other distributors. He said the company may open outlets in KCR stations, following its successful foray into MTR stations.

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