TCL net lifted by smartphone transition

Mobile phone maker TCL Communication Technology yesterday reported a 50 per cent growth in net profit to HK$14 million for the nine months to September.

The result marked a major recovery from a loss in the third quarter of last year of HK$90.85 million to a profit of HK$223 million in the three months to September this year.

The company had blamed the steep drop in earnings in the year-ago period on lower margins from its prior emphasis on basic mobile phones.

It had since adopted a "step-up strategy" to migrate its product lines from these basic "feature phones" to smartphones, it said.

Chief executive Guo Aiping said yesterday the transition had been successfully negotiated and sales volume of its smartphones and smart devices had surged 136 per cent year on year to 9.9 million units in the first nine months of this year.

But TCL's sales nonetheless continue to lag behind its competitors on the mainland.

Sales volume of handsets and other products dropped 17 per cent to 3.7 million units, pulling revenue down by 28 per cent to HK$1 billion.

In order to strengthen its competitiveness, Guo said the company needed to shift new products on to the market in the shortest time possible.

"The process from ideas to product launch should take no more than four to five months," he said, adding that the company would continue to invest heavily in research and development.

Growth in the overseas market contributed to the company's turnaround in revenue.

Meanwhile, television maker TCL Multimedia Technology, a sister company, reported a drop in gross profit of 4.4 per cent year on year to HK$4.1 billion for the first nine months.

Net profit rose 82.4 per cent to HK$112 million.