Centron Telecom Announces 2017 Interim Results

Highlights

• Revenue increased by 0.6% to RMB792.7 million
• Revenue from manufacture and sale of private telecommunications network systems and products increased by 17.2% to RMB$118.1 million, which will be the key growth driver of the Company
• Profit for the period attributable to ordinary equity holders of the Company amounted to RBM$65.8 million, representing an increase of 19.6%
• Basic earnings per share increased by 19.7% to RMB$8.45 cents

Financial Highlights

HONG KONG, CHINA - Media OutReach - 29 August 2017 - Centron Telecom International Holding Limited(or "the Company", together with its subsidiaries, the "Group", HKSE: 1155) announced its interim results for the 6 months ended 30 June 2017 (the "Reporting Period" or the "Period"). During the first half year of 2017, Centron Telecom recorded a profit attributable to ordinary equity holders of the Company amounted to RMB$65.8 million (6 months ended 30 June 2016: RMB$55.0 million), and recorded revenue of RMB$792.7 million (6 months ended 30 June 2016: RMB$787.8 million), representing a growth of 19.6% and 0.6% period-on-period respectively.

Basic earnings per share amounted RMB$8.45 cents (6 months ended 30 June 2016: RMB$7.06 cents).

BUSINESS REVIEW

During the Reporting Period, revenue from manufacture and sale of public network wireless coverage system and products, manufacture and sale of private telecommunications network systems and products, and sale of digital television network coverage equipment were approximately RMB$673.7 million, RMB$118.1 million and 0.9 million respectively, representing approximately 85.0%, 14.9% and 0.1% of the Group's total revenue.

During the Reporting Period, revenue from (i) China Mobile Communications Corporation and its subsidiaries and branch companies (collectively "China Mobile Group"); (ii) China United Network Communications Group Company Limited and its subsidiaries and branch companies (collectively "China Unicom Group"); (iii) China Telecommunications Corporation and its subsidiaries and branch companies (collectively "China Telecom Group"); (iv) China Tower Corporation Limited and its subsidiaries and branch companies (collectively "China Tower Group"); and (v) other customers were as follows:

Public Network Wireless Coverage System and Products

During the first half year of 2017, revenue from public network wireless coverage system and products business was approximately RMB673.7 million, representing 85.0% of the Group's total revenue.

After the industry's investment and construction in recent years, the 4G wave has smoothly entered into the network mature cycle with a solid foundation and considerable scale. In 2017, the main base station's construction peak stage has basically finished. The operator will focus on the depth coverage and network optimization of the indoor distribution. The Group recorded more or less the same level in revenue from public network wireless coverage system and products business for the six months ended 30 June 2017. In the reporting period, the Group continued to adjust its product structure and stabilize its 4G products, technologies and solutions. Particularly, products like multi-mode digital signal distribution system and equipment, high-performance passive devices and multi-mode indoor distribution solution products were still the main leading products of the Group and maintained relative high profit margin.

For every phase of the network construction of each network operator, operation focus, nationwide network coverage optimization and hot coverage, the Group interprets key points of communication policy, grasps the technology trend, and strives to develop products and technologies to meet the market demands, and focuses on its service advantages to participate in integrated engineering and construction services in connection with 4G network coverage and optimization in major cities throughout China.

Private Telecommunications Network Systems and Products

In the reporting period, the Group recorded revenue from the private telecommunications network systems and products of RMB118.1 million, representing approximately 14.9% of the Group's total revenue and increased 17.2% when compared to the same period of last year.

The rapid development of the private network communication technology has led to the expansion of the private network communication applications, and the market scale has been further expanded. As the private network users constantly improve their own management systems and pursue higher management efficiency, their demand trends become more and more diversified and refined and put forward higher requirements to the application of communication technology. The ability to provide personalized and integrated communication information solutions to customers determines the market position of the service provider in the industry. The Group continuously provides a series of higher cost-effective and market-oriented digital cluster system products for both commercial private network users and industry private network users. The Group also timely captures the industry's technology developing information and constantly pays attention to the international advanced concepts, products and technologies. The research and development of products cover base station, terminal, repeaters, core network, dispatch centers, multi-network convergence access system and so on. In the private network communication aspects of the judiciary, civil defense, public security and emergency, the Group achieves steady growth of sales and enhances the brand awareness.

In the reporting period, the Group recorded increase in revenue from the private telecommunications network systems and products, and raise the proportion to the turnover. The Group currently continues with the parallel sales of analog terminal and digital terminal and its related system, takes advantage of the existing economies of scale and strengthens the marketing channels while in consolidation with leading research and development resources, specialized manufacturing base, experienced production team, customized service concepts to provide the market with more comprehensive private telecommunications digital system products and solutions.

PROSPECTS

As the 4G network infrastructure has reached into mature stage, the 4G network coverage optimization will be continuously bedding in 2017 and 2018. The internet of things, optical device, data center and cloud computing and other industry segmentation continue to develop and the 5G network technology has in testing period. Public Network Wireless Coverage System and Products will be growing continuously. In the private communication aspects, benefiting from the policy of "analog to digital" and "wide and narrow band fusion" and the national legislation of communication network security, the private communication technology gradually digitalized and the prospect is optimistic.

Public Network Wireless Coverage System and Products

Every revolutions of the information technology brings about great changes in society. Every upgrade of Internet application comes from the reform of generation of communication technological model. In the next period of time, while the extensive applications of 4G networks, 5G will start building. In the aspect of the layout of 5G network, operators have discussed the timetable of commercial application. In the context of the switching of the communication technology, communication equipment manufacturers and network service providers in connection to their own transformation development and huge social demand will achieve themselves and the industry integration and transformation in cross-border cooperation.

Combined with the industry characteristics, the Group will continue to innovate in order to enable its products to be combined into a serial and digital structure. Based on the cost advantages built up, differentiation strategy advantages and focused development advantages to steadily develop the upgrade of multi-mode digital signal distribution systems, multi-mode and multi-frequency indoor signal distribution solutions, the Group will maximize its advantages on network optimization, indoor signal coverage as well as the building network coverage engineering resources accumulated over the years.

Private Telecommunications Network Systems and Products

The strategy of "analog to digital" will implement in the beginning of 2018, and will speed up the trend of the total digitalization of the private network communication industry. Spectrum resources open to particular industries, the complementary advantages of narrowband and broadband cluster communication and the gradual "wide and narrow band fusion" becomes the consensus of industry development. The development of the digital private network communication highlights the safety importance of the Internet Plus and network security defense technologies will become more intelligent. The private network communication's digitalization and its market requirements will develop by leaps and bounds.

The Group will be in line with the development trend of the industry, and build a more mature sales network and form a solid marketing system in China and become a strong core competitiveness. Command of advanced technology and establishment of good customer relationships through various channels, not only remain ahead in the public network area, the Group will continue to invest resources in private network's products and related research and development to guarantee the rapid growth of the private network business. The Group will further explore and timely adjust different business models, devote more efforts to the development of products to extend to whole products series and better serve the customers.

Mr. Dai Guoliang, Chairman of Centron Telecom International Holding Limited, said that, "Looking forward, the Group will respond to the needs of the country and industry, look into the industry development trend, implement effective measures, and focus on improving our technology, production and service capacity to further stabilize and consolidate the development in the mobile public network service optimization and the private network communication business."

About Centron Telecom International Holding Limited

Centron Telecom International Holding Limited (HKSE stock code: 1155) has been committed to pursuing the technological advancement of information and communication since incorporation. Currently it has grown rapidly to become one of the innovation-driven leaders in China mobile network coverage and digital private network products. Its diversified operation mode is dedicated to public mobile communication network and private communication network, focusing on network optimization and maintenance, wireless data access and digital intercom and digital trunking. China Mobile Group, China Unicom Group, China Telecom Group and China Tower Group are its major customers.