Risecomm Announces 2018 Interim Results
Growth of Two Major Businesses Drives Total Revenue Increases 27.0%
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Poised to Face a New Phase of Upgrades for Smart Meters in China
(Hong Kong, 30 August 2018) Risecomm Group Holdings Limited (“Risecomm” or the “Group”) (Stock Code: 1679), one of the largest power-line communications (“PLC”) technology enterprises in China, has announced its interim results for the six months ended 30 June 2018 (the “period under review”).
During the period under review, the Group achieved growth in both the automated meter reading (“AMR”) business and the smart energy management (“SEM”) business, driving revenue to increase by approximately 27.0% to approximately RMB174 million. However, affected by the decrease of gross profit in the AMR business segment, the Group’s gross profit was adjusted to approximately RMB47.2 million, with a gross profit margin of approximately 27.1%. Net loss for the period under review attributable to the equity shareholders of the Company was approximately RMB9.2 million.
The Group’s two major business segments, namely the AMR and SEM businesses, both recorded growth, occupying approximately 94.5% and 5.5% of its total revenue respectively.
During the period under review, revenue from the AMR business segment increased by approximately 26.8% to approximately RMB164.8 million, which was attributable to the significant increase in sales of PLC products to customers through trading sales and local bidding under the State Grid Corporation of China (“State Grid”) and China Southern Power Grid Co., Ltd. (“Southern Grid”).
Generally speaking, sales secured through centralized bidding under the State Grid earn a relatively higher gross profit margin when compared with those through local bidding under the State Grid and Southern Grid. Given that the penetration of smart meters under the first round of the State Grid’s commercial deployment was reaching saturation and a new industry standard for broadband PLC was formally adopted in 2017, the State Grid had exhibited a slowdown in its procurement of smart meters during the transitional period. Therefore, a significant drop in the revenue from sales of PLC products to customers through centralized bidding was recorded when compared to the corresponding period last year. The surge of revenue from sales of PLC products to customers through trading sales and local bidding under the State Grid and Southern Grid only partially compensated for the decrease of gross profit attributable to the decrease in revenue from sales of PLC products to customers under State Grid centralized bidding. With the constant change of the AMR products market demand, the Group will adjust its business strategy and expand its businesses flexibly in order to keep pace with market trends.
Revenue from the SEM business segment increased approximately 31.9% to approximately RMB9.5 million, benefitting from a significant increase in the sales of streetlight control devices during the period under review. As a pioneer in the SEM industry, the Group has strived to enhance product development as well as its sales and marketing capability, with the aim to boost the growth of this segment.
For more details, please download 2018 Interim report （in PDF）