Funtalk Q4 FY2010 Profit Up 432% YoY
PR Newswire Asia, 6/15/10
Chinese mobile phone distributor Funtalk (Nasdaq: FTLK) has announced its unaudited financial results for the fourth quarter and fiscal year ended March 31, 2010, with net revenue for Q4 FY2010 reaching USD 287.8 mln, up 46.2% YoY. Net income was USD 13.7 mln, or 4.8% of total revenue, for Q4 FY2010, up 431.5% YoY compared to USD 2.6 mln, or 1.3% of total revenue for Q4 FY2009.
Funtalk currently generates revenues from two business segments: retail and distribution of mobile phones and related services and accessories. Retail revenue for Q4 FY2010 was USD 177.7 mln, up 107.9% YoY. The strong growth over the same quarter last fiscal year in the retail segment was primarily due to the inclusion of sales volume from seven retail companies covering 477 locations in Q4 FY2010 compared to sales volume of six retail companies covering 191 locations in Q4 2009. Organic growth (excluding the acquisition of Shanghai Lezhiyu Telecommunications Equipment Co., Ltd. ("Shanghai Xieheng") (formerly known as "Shanghai Xieheng Telecommunications Equipment Co., Ltd.") in Q3 FY2010) of Funtalk's retail segment accounted for an increase of revenue of 35.4% to USD 116.5 mln in Q4 FY2010 from USD 85.5 mln in Q4 FY2009. Shanghai Xieheng contributed approximately USD 61.2 mln in revenue to Funtalk's retail segment in Q4 FY2010.
Distribution revenue for Q4 FY2010 was USD 110.1 mln, representing a slight 1.1% decrease from Q4 FY2009. The decreased distribution revenue over the same quarter last fiscal year was primarily due to a 7.6% decrease in average selling prices of mobile phones in Funtalk's distribution business, partially offset by a 12.2% increase in the total volume of mobile phones sold. The decrease in average selling prices was primarily due to a higher mix of lower-end priced handsets sold compared to the same period in 2009. The increase in wireless devices sold through distribution was primarily driven by an increased market demand for lower-end priced handsets.
For FY2010, net revenue was USD 854.1 mln, a 49.7% increase year-over-year from USD 570.7 mln.
Net income was USD 31.8 mln, or 3.7% of total revenue, for FY2010, a year-over-year increase of 57.9% from USD 20.1 mln, or 3.5% of total revenue.
In April and May 2010, Funtalk acquired:
Certain mobile phone retail assets and businesses located in Shandong Province, China, from an unaffiliated third party for RMB 61.5 mln (approximately USD 9.0 mln);
100% of the outstanding equity interests of Beijing Yipai Innovation Technology Development Co., Ltd., ("Beijing Yipai"), from an unaffiliated third party. Beijing Yipai is a mobile phone retailer and after-sales service provider based in Beijing, China. The consideration for this acquisition was RMB 105.0 mln (approximately USD 15.4 mln), subject to adjustment based on Beijing Yipai's net profit in the fiscal years ending March 31, 2011 and 2012;
49% of the outstanding equity interests of Kunming Golden Broadway Technology Development Co ("Kunming Golden Broadway"), from Qiu Mingxi, the chairman of Kunming Golden Broadway. Prior to the acquisition, Beijing Funtalk owned 51% of the equity interests of Kunming Golden Broadway. Upon consummation of the transaction, Kunming Golden Broadway became a wholly owned subsidiary of Beijing Funtalk. Kunming Golden Broadway engages in the retail of wireless telecommunications devices and accessories in Yunnan Province, China. The consideration for this acquisition was RMB 39.7 mln (approximately USD 5.8 mln);
Certain mobile phone retail assets and businesses located in Hunan Province, China. The assets and businesses were acquired from an unaffiliated third party by He Huimin, the chairman of Hunan Feon Telecommunications Technology Co., Ltd., ("Hunan Feon"), Funtalk's wholly-owned subsidiary. He subsequently transferred the assets and businesses to Hunan Feon. The consideration for this acquisition was RMB 54.3 mln (approximately USD 8.0 mln).
Following the above acquisitions, as of the date of this announcement, Funtalk has a network of mobile phone retail chains with aggregate retail space of approximately 162,000 square meters in approximately 106 cities with a total of 544 mobile phone retail stores located in the provinces of Hebei, Yunnan, Henan, Hunan, Jiangsu, Shandong, Shanxi, Gansu, Inner Mongolia, Zhejiang, Guangdong, Anhui and Liaoning, and Beijing, Chongqing and Shanghai.
Funtalk expects its revenue for Q1 FY2011 to be in the range of USD 220 mln to USD 240 mln and its net income to be in the range of USD 7.0 mln to USD 9.0 mln. Funtalk expects an approximately even revenue split between its retail and distribution business segments in Q1 FY2011. For FY2011, Funtalk expects its revenue to be in the range of USD 1.0 bln to USD 1.2 bln and net income attributable to Funtalk to be in the range of USD 40 mln to USD 45 mln. Funtalk expects a revenue split of approximately 57% for its retail business segment and approximately 43% for its distribution business segment in FY2011.
To view Funtalk's complete financial report, please click here.
Keywords: Q4 2010 guidance Beijing Yipai Kunming Golden Broadway Hunan Feon profit retail revenue wireless Xieheng Funtalk FTLK handset fiscal report M&A
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