COGO » Topics » Gross margin

This excerpt taken from the COGO 10-Q filed Nov 9, 2007.

Gross margin

Overall gross profit was RMB222,011 thousand in the nine months ended September 30, 2007, an increase of RMB46,573 thousand, or 26.5%, when compared to RMB175,438 thousand in the nine months ended September 30, 2006. Overall gross margin percentage was 19.3% in the nine months ended September 30, 2007, as compared to 18.6% in the nine months ended September 30, 2006.

Component Solutions

Net revenue and income from operations for Component Solutions for the nine months ended September 30, 2007 and 2006 were as follows:

 

     2007    2006
     RMB’000    RMB’000

Component Solutions:

     

Mobile handset

   466,843    378,704

Telecommunications equipment

   351,688    329,426

Digital media and others

   284,659    202,691
         

Net revenue

   1,103,190    910,821
         

 

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Component Solutions net revenue increased RMB192,369 thousand, or 21.1%, in the nine months ended September 30, 2007 when compared to the nine months ended September 30, 2006. The increase was primarily due to the expanding Chinese economy, which drove the growth in all markets of Component Solutions. Revenues from mobile handsets, telecommunications equipment, and digital media and other components increased by RMB88,139 thousand, RMB22,262 thousand and RMB81,968 thousand, respectively.

The increase in mobile handset and telecommunications equipment component sales were due to the stable growth in both the customer base and product types when compared to 2006. Increase in sales orders from some existing customers, such as ZTE, also contributed to the increase. The increase in digital media and other components sales was due to greater variety of products.

Services

Net revenue and income from operations for Services for the nine months ended September 30, 2007 and 2006 were as follows:

 

     2007    2006
     RMB’000    RMB’000

Net revenue

   46,118    34,555

Services net revenue increased RMB11,563 thousand, or 33.5%, in the nine months ended September 30, 2007 when compared to the nine months ended September 30, 2006. The increase was mainly attributable to greater sales generated from software design services.

This excerpt taken from the COGO 10-Q filed Aug 9, 2007.

Gross margin

Overall gross profit was RMB140,179 thousand in the six months ended June 30, 2007, an increase of RMB26,695 thousand, or 23.5%, when compared to RMB113,484 thousand in the six months ended June 30, 2006. Overall gross margin percentage was 19.2% in the six months ended June 30, 2007, as compared to 18.8% in the six months ended June 30, 2006.

Component Solutions

Net revenue and income from operations for Component Solutions for the six months ended June 30, 2007 and 2006 were as follows:

 

     2007
RMB’000
   2006
RMB’000

Component Solutions:

     

Mobile handset

   293,697    248,447

Telecommunications equipment

   228,464    211,513

Digital media and others

   182,710    124,525
         

Net revenue

   704,871    584,485
         

Component Solutions net revenue increased RMB120,386 thousand, or 20.6%, in the six months ended June 30, 2007 when compared to the six months ended June 30, 2006. The increase was primarily due to the expanding Chinese economy, which drove the growth in all markets of Component Solutions. Revenues from mobile handsets, telecommunications equipment, and digital media and other components increased by RMB45.3 million, RMB17.0 million and RMB58.2 million, respectively.

 

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The increase in mobile handset and telecommunications equipment component sales were due to the stable growth in both the customer base and product types in the six months ended June 30, 2007 when compared to the six months ended June 30, 2006. The increase in digital media and other components sales was due to more variety of products.

Services

Net revenue and income from operations for Services for the six months ended June 30, 2007 and 2006 were as follows:

 

    

2007

RMB’000

  

2006

RMB’000

       

Net revenue

   24,089    19,712

Services net revenue increased RMB4,377 thousand, or 22.2%, in the six months ended June 30, 2007 when compared to the six months ended June 30, 2006. The increase was mainly attributable to greater sales generated from engineering and software design services.

This excerpt taken from the COGO 10-Q filed May 10, 2007.

Gross margin

Overall gross margin amount was RMB65,814 thousand in the first quarter 2007, an increase of RMB13,781 thousand, or 26.5% when compared to RMB52,033 thousand in the first quarter of 2006. Overall gross margin percentage was 19.1% in the first quarter of 2007, as compared to 19.1% in the first quarter of 2006.

Component Solutions

Net revenue for Component Solutions for the three months ended March 31, 2007 and 2006 were as follows:

 

     2007    2006
     RMB’000    RMB’000

Component Solutions:

     

Mobile handset

   137,934    120,022

Telecommunications equipment

   109,864    95,184

Consumer electronics and others

   85,279    48,616
         

Net revenue

   333,077    263,822

Component Solutions net revenue increased RMB69,225 thousand, or 26.2% in the first quarter of 2007 when compared to the first quarter of 2006. The increase was primarily due to the growth in the sales of mobile handset and telecommunications equipment components, which increased revenue by RMB17.9 million and 14.7 million respectively.

The increase in mobile handset and telecommunications equipment component sales were due to the stable growth in both the customer base and product types in the first quarter of 2007 when compared to the first quarter of 2006. The increase in digital media and other components sales was due to more variety of products.

 

18


Services

Net revenue for Services for the three months ended March 31, 2007 and 2006 were as follows:

 

     2007    2006
     RMB’000    RMB’000

Net revenue

   11,066    7,905

Services net revenue increased RMB3,161 thousand, or 40.0% in the first quarter of 2007 when compared to the first quarter of 2006. The increase was mainly contributed by the higher revenue from engineering software sales.

This excerpt taken from the COGO 10-Q filed Nov 14, 2006.

Gross margin

Overall gross margin amount was RMB175,438 thousand in the nine months ended September 30, 2006, an increase of RMB74,530 thousand, or 73.9% when compared to RMB100,908 thousand in the nine months ended September 30, 2005. Overall gross margin percentage was 18.6% in the nine months ended September 30, 2006, as compared to 17.0% in the nine months ended September 30, 2005. The increase in both gross margin amount and percentage is primarily attributed to a change in product mix. Digital media module related sales have a higher average margin (20% to 30%) than the mobile handset and telecommunications sales.

 

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Component Solutions

Net revenue and income from operations for Component Solutions for the nine months ended September 30, 2006 and 2005 were as follows:

 

     2006    2005
     RMB’000    RMB’000

Component Solutions:

     

Mobile handset

   378,704    322,227

Telecommunications equipment

   329,426    231,510

Digital media and others

   202,691    41,047
         

Net revenue

   910,821    594,784

Income from operations

   88,420    66,358

Component Solutions net revenue increased RMB316,037 thousand, or 53.1% in the nine months ended September 30, 2006 when compared to the same period in 2005. The increase was primarily due to the higher revenue from the sales of digital media components, which increased more than RMB161.6 million, as well as the continued growth in the sales of both mobile handset and telecommunications equipment components, which increased revenue by RMB56.5 million and RMB97.9 million, respectively.

The increase in mobile handset and telecommunications equipment component sales were due to the stable growth in both the market size and product types for the nine months ended September 30, 2006 when compared to same period in 2005. The increase in digital media and other components sales was due to more variety of products introduced such as digital television products.

Component Solutions income from operations increased RMB22,062 thousand, or 33.2% for the nine months ended September 30, 2006 when compared to the same period in 2005. The increase was mainly attributed to a significant increase in net revenue from all product components in the Component Solutions segment. This increase in revenues from operations was partly offset by an increase in operating expenses, which resulted from an increase in cost for higher sales volumes, and for additional offices and employees.

Engineering Services

Net revenue and income from operations for Engineering Services for the nine months ended September 30, 2006 and 2005 were as follows:

 

     2006    2005
     RMB’000    RMB’000

Net revenue

   34,555    —  

Income from operations

   5,689    —  

Engineering Services net revenue and income from operations were derived from the provision of technology and engineering services, business process outsourcing, network system integration and related training and maintenance services after the acquisition of the Huameng PRC in January 2006.

 

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This excerpt taken from the COGO 10-Q filed Aug 14, 2006.

Gross margin

Overall gross margin amount was RMB113,484 thousand in the six months ended June 30, 2006, an increase of RMB50,527 thousand, or 80.3% when compared to RMB62,957 thousand in the six months ended June 30, 2005. Overall gross margin percentage was 18.8% in the six months ended June 30, 2006, as compared to 16.6% in the six months ended June 30, 2005. The increase in both gross margin amount and percentage is primarily attributed to a change in product mix. Consumer electronics module related sales have a higher average margin (20% to 30%) than the mobile handset and telecommunications sales. In addition, the launch of the new engineering services, which also has a higher gross margin than the current blended margin, also contributed to the increase in overall gross margin.

Component Solutions

Net revenue and income from operations for Component Solutions for the six months ended June 30, 2006 and 2005 were as follows:

 

     2006    2005
     RMB’000    RMB’000

Component Solutions:

     

Mobile handset

   248,447    211,765

Telecommunications equipment

   211,513    144,901

Consumer electronics and others

   124,525    23,132
         

Net revenue

   584,485    379,798

Income from operations

   60,497    42,815

Component Solutions net revenue increased RMB204,687 thousand, or 53.9% in the six months ended June 30, 2006 when compared to the same period in 2005. The increase was primarily due to the higher revenue from the sales of consumer electronics components, which increased more than RMB101.4 million, as well as the continued growth in the sales of both mobile handset and telecommunications equipment components, which increased revenue by RMB36.7 million and RMB66.6 million respectively. The continued growth was driven by the expanding Chinese economy, particularly the increase in Chinese consumer disposable income and the further expansion of domestic Chinese telecom vendors into new and emerging international markets.

The increase in mobile handset and telecommunications equipment component sales were due to the stable growth in both the customer base and product types for the six months ended June 30, 2006 when compared to same period in 2005. The increase in consumer electronics and other components sales was due to more variety of business lines such as digital TV products.

Component Solutions income from operations increased RMB17,682 thousand, or 41.3% for the six months ended June 30, 2006 when compared to the same period in 2005. The increase was mainly attributed to a significant increase in net revenue from all products in the Component Solutions segment, and the higher gross margin of Component Solutions products. This increase in income from operations was partly offset by an increase in operating expenses, which resulted from an increase in cost for higher sales volumes, and for additional offices and employees.

Engineering Services

Net revenue and income from operations for Engineering Services for the six months ended June 30, 2006 and 2005 were as follows:

 

     2006    2005
     RMB’000    RMB’000

Net revenue

   19,712    —  

Income from operations

   5,086    —  

 

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Engineering Services net revenue and income from operations were derived from the provision of technology and engineering services, business process outsourcing, network system integration and related training and maintenance services after the acquisition of the Huameng PRC in January 2006.

This excerpt taken from the COGO 10-Q filed May 15, 2006.

Gross margin

Overall gross margin amount was RMB52,033 thousand in the first quarter 2006, an increase of RMB25,748 thousand, or 98% when compared to RMB26,285 thousand in the first quarter of 2005. Overall gross margin percentage was 19.1% in the first quarter of 2006, as compared to 15.3% in the first quarter of 2005. The increase in both gross margin amount and percentage is primarily attributed to a change in product mix. Consumer electronics components sales have a higher average margin (20% to 30%) than the mobile handset and telecommunications sales. In addition, the provision for the new engineering services in the first quarter of 2006, in which its gross margin approximated 48%, also contributed to the increase in overall gross margin.

Component Solutions

Net revenue and income from operations for Component Solutions for the quarters ended March 31, 2006 and 2005 were as follows:

 

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2006

RMB’000

  

2005

RMB’000

Component Solutions:

     

Mobile handset

   120,022    102,419

Telecommunications equipment

   95,184    61,705

Consumer electronics and others

   48,616    7,877
         

Net revenue

   263,822    172,001

Income from operations

   30,306    18,391

Component Solutions net revenue increased RMB91,821 thousand, or 53.4% in the first quarter of 2006 when compared to the first quarter of 2005. The increase was primarily due to the higher revenue from the sales of consumer electronics components, which increased more than RMB40 million, as well as the continued growth in the sales of both mobile handset and telecommunications equipment components, which increased revenue by RMB17.6 million and RMB33.5 million respectively

The increase in mobile handset and telecommunications equipment component sales were due to the stable growth in both the customer base and product types in the first quarter of 2006 when compared to the first quarter of 2005. The increase in consumer electronics and other components sales was due to more variety of products introduced since the latter half of 2005, such as digital TV products.

Component Solutions income from operations increased RMB11,915 thousand, or 64.8% in the first quarter of 2006 when compared to the first quarter of 2005. The increase was mainly attributed to a significant increase in net revenue from all products in the Component Solutions segment, and the higher gross margin of Component Solutions products. This increase in income from operations was partly offset by an increase in operating expenses, which resulted from an increase in cost for higher sales volumes, and for additional offices and employees.

Engineering Services

Net revenue and income from operations for Engineering Services for the quarters ended March 31, 2006 and 2005 were as follows:

 

    

2006

RMB’000

  

2005

RMB’000

Net revenue

   7,905    —  

Income from operations

   3,308    —  

Engineering Services net revenue and income from operations were derived from the provision of technology and engineering services, business process outsourcing, network system integration and related training and maintenance services after the acquisition of the Huameng PRC in January 2006.

This excerpt taken from the COGO 10-Q filed May 16, 2005.

Gross margin

 

Gross margins remained stable at RMB26,285 thousand, or approximately 15.3%, compared to RMB23,662 thousand or 15.4% in the first quarter of 2004, with the minor fluctuation due to changes in product mix during the quarter.

 

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