Strong UK demand spurs firm to market own-brand products across Europe Computime Group, an electronic control and automation devices maker that listed in Hong Kong in October last year, is to maintain 15 per cent to 25 per cent annual turnover growth in the next few years on European demand for its Salus products. The Salus brand of switches and thermostats, which the group began producing in 2004, recorded triple-digit growth in the six months to September last year, accounting for less than 1 per cent of total sales. 'We will boost sales of Salus products to more than 10 per cent of total sales within three years,' said chief executive Bernard Auyang. The Salus range has a gross margin of 40 per cent to 45 per cent and net margin of 12 per cent to 13 per cent, or five percentage points more than the company's other goods. Shenzhen-based Computime, which competes with London-listed Invensys and New York-listed Honeywell, said Salus products, now being sold only in Britain, would soon become available in Germany and France and later throughout Europe. Product sales in Europe would represent about 30 per cent of revenue for the year to March, compared with 15 per cent a year ago. The revenue contribution from North America fell to 60 per cent from 75 per cent for the period, Mr Auyang said. Last month, the firm reported 15.7 per cent revenue growth to HK$1.04 billion for the six months to September last year, boosted by demand for its appliance control products, the second-largest contributor. Net profit rose 12.3 per cent to HK$73.96 million in the first half from a year earlier. Gross margin was 17 to 18 per cent. Sales from the unit surged 60 per cent to HK$440 million on increased orders from white-goods makers, accounting for about 42 per cent of sales. The white goods sector grew after the launch of products such as controls for induction ovens and refrigerators. Computime also moved into the spa and pool sector by signing up two new customers. Revenue from the building and home controls business, including Salus products, fell 1.6 per cent to HK$478 million, accounting for 46 per cent of first-half sales. The company also sells health-care, commercial and industrial control products. 'The China market has great potential and we may develop it either through mergers and acquisitions or by setting up a new sales team there,' Mr Auyang said. The mainland and other Asian countries account for about 10 per cent of Computime's sales. The company, founded by chairman Ho Auyang in 1974 as a clock maker, started to produce and sell programmable timers and thermostats to the United States in 1982. Computime has about HK$400 million cash on hand. Mr Auyang said it would spend about HK$50 million to buy new machines this year as part of a drive to improve quality and boost output. 'Our defect rate is about 200 parts per million units and our goal is zero defects,' he said. Money would also be spent on acquisitions. The firm was seeking to buy a US technology company to develop new products and would acquire manufacturing companies from business partners, Mr Auyang said. A decision had yet to be made on specific targets, he added. Computime shares, which plummeted below their initial public offering price of HK$2.28 in October last year after an initial surge, have recovered 7.4 per cent since hitting HK$2.27 on December 28. The shares closed 0.4 per cent lower yesterday at HK$2.44.