Comba Telecom profit rises 24.1% on sustained demand for 5G infrastructure

COMBA Telecom on Thursday (Aug 24) posted a 24.1 per cent rise in net profit to HK$112.2 million (S$19.4 million) for the half-year ended Jun 30, 2023, from HK$90.4 million a year earlier.

The group, which provides wireless and information communications solutions and services, also posted a 6.1 per cent rise in revenue to HK$3.2 billion over the same period, from HK$3 billion the year before.

At an earnings briefing on Friday that was conducted in Mandarin, chairman Tony Fok said that despite global uncertainties, countries and regions have continued to build out their 5G infrastructure.

All four of the group’s revenue segments grew in the first half of the year.

Revenue for its base-station antennas and subsystems business rose 2.3 per cent year on year to HK$1.7 billion on the back of the phased launch and delivery of its overseas base-station antenna projects.

Revenue from wireless-transmission systems more than doubled to HK$238 million, clocking significant growth in sales of its digital microwave system.

Fok said that the group has also successfully developed and trialled “green antennas”, which are about 20 per cent more energy-efficient with mainland China’s mobile network operators.

“On the international market, our green antennas have tested well with well-known network operators, and have been entered into many of these operators’ purchasing catalogues,” he said. He added that he expects such equipment to bring in significant revenue for the group in the future.

The group’s research and development expenses fell 17.6 per cent to HK$213.9 million for the half-year; Fok said the group was more focused on being effective with the use of its resources, and that it continued to have faith in its efforts.

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Comba also managed to further diversify its revenue sources for the half-year by continuing to expand globally. International customers and core equipment manufacturers contributed 39.9 per cent of the group’s revenue, compared to 33.4 per cent the year before.

Executive director and group chief financial officer Ken Chang noted that the group’s total operating expenses fell 14.1 per cent year on year to HK$640 million, as it continued to control costs and improve efficiency.

The group’s board also proposed an interim dividend payment of HK$0.012 per share for the half-year, from HK$0.01 last year.

Although the dividend payout ratio for the half-year fell to about 29.7 per cent from 30.8 per cent in the year before, Fok said that it is better for the group to retain some cash, to fund its research efforts to remain competitive.

Hong Kong-listed Comba Telecom began trading on the Singapore Exchange after a secondary listing on Jan 4. Its shares closed flat at S$0.205 on Friday, after the announcement.