Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present to you the Annual Report of 8Telecom International Holdings Co. Ltd. (“8Telecom” or “the Group”) for the financial year ended 31 December 2010 (“FY2010”).
Year 2010 witnessed breakthrough developments of the Group as we strengthened our position as China’s leading telecommunication infrastructure solution provider and formally diversified into commercial property development business.
The Year In Review
We achieved a 60.0% rise in net profit to RMB115.3 million in FY2010 from RMB72.0 million in FY2009.The increase was lifted mainly by the one-off gain from PRC government land acquisition.
FY2010 sales experienced a dip of 9.2% to RMB503.4 million as we held back the sale of the remaining units in Linping Times Square, Hangzhou City, in anticipation of better valuation after the completion of a nearby subway station in 2012. However, our telecommunication-related segments recorded recovery in sales for the third consecutive quarter of FY2010, backed by the pickup in capital expenditure by China’s telecommunication operators in the second half of 2010 and well response of our latest
range of telescopic towers launched in April 2010 by our customers.
Product Innovation
We will continue to leverage on our strong R&D capabilities to develop and launch new
telecommunication pipes and towers that meet the changing needs of our customers. In April 2010, we launched the latest range of telescopic towers securing a contract as large as RMB20.0 million in September 2010. Customer demand for our telescopic towers
remains resilient due to the products’ flexibility in deployment which reduces installation time. The Group has secured 65 patents and registered 58 trademarks to date.
Market Penetration
Given the rising demand for services of installation &maintenance of telecommunication networks & base stations from telecommunication operators, we have put more strategic focus on our telecommunication engineering services segment since last year and built up our capabilities in the Zhejiang area. We were awarded the “First-class Qualification of Contractor For Telecommunication Engineering Project” by the Chinese government
in 2010, as one of the only four winners in Zhejiang Province so far.
Leveraged on our expertise in Zhejiang area, we plan to expand our reach in the other areas in China.
Property Arm
Already a leading telecommunication infrastructure solution provider in China, we plan to ride the red hot construction sector in the Mainland to drive our business to new heights. Having successfully developed and sold a commercial property in 2009-2010, we are looking towards our remaining land bank to further extend our reach in the commercial
property market.
Benefiting from a land exchange led by the Hangzhou Yuhang Redevelopment Committee (“HYRC”), we successfully acquired a 113,399 sqm, 40-year leasehold land at Wuchang District, Hangzhou City.
We believe this added land bank has great redevelopment potential and plans are already underway to redevelop the Wuchang property into a high-end commercial property project with a total planned GFA of 300,000 sqm, which is nearly 6 times larger than our previous Linping Time Square property, standing as a significant catalyst to our revenue stream.
Following the addition of the second piece of land to the Group, we have made a strategic move to include property development as one of our core businesses in 2010.
With regards to our remaining 4,037 sqm of office space and 6,882 sqm of retail space in Linping Times Square property, we plan to lease out for recurring revenue in the future, in anticipation of a long-term growth in demand of high-end commercial property in the Linping District, Hangzhou City, and better valuation after the completion of a nearby subway station in 2012.
Dividend
In view of our strong performance and to reward shareholders for your continued support, the Group has proposed a final dividend of 0.6147 Singapore cents in FY2010.
Appreciation
On behalf of our Board of Directors, I would like to extend my utmost appreciation to our shareholders, customers, directors and business associates for your support and belief in the Group. I would also like to thank our management and staff for your dedication and commitment. We will continue to put in our best efforts to continue to deliver value to all our stakeholders.
Ye Tianyun
Executive Chairman and CEO |
