The performance of the Group this year refl ects the growing business management capabilities of the team. Their abilities to switch product mix, control costs and improve margins have been instrumental in the strong financial performance of the Group in FY2011.
Across the organization, rationalization of product lines and careful evaluation of product lines profitability have resulted in the addition of new product lines and the cessation of certain product lines. Furthermore, to ensure that the teams across Asia are coordinated, quarterly and semiannual regional meetings were held to review the business performance and share market intelligence.
As principals consolidate their distribution strategies globally, they are increasingly looking to appoint selected distributors with extensive market reach to reduce resource duplication and improve efficiencies. Corresponding to this shifting trend, Excelpoint has similarly expanded its operations and upgraded the competencies within its team, readying them to take on expanded roles. The growing business management capabilities within the Group are evidenced by the margin improvement despite the marginally lower revenue this year.
For the financial year ended 31 December 2011, the Group's revenue totalled US$489.4 million compared to US$496.4 million reported in the previous financial year. Net profit after tax rose by 84.8% from US$2.6 million to US$4.7 million at the close of FY2011. The key factors underlying the performance this year are the shifts in the product mix and the tight control on operating expenses, which reported a year-onyear increase of 3.1%. Additionally, strong credit policies and strategic inventory management have helped the Group improved the quality of its trade debtors and enhanced the management of its cash and financial resources.
Geographically, Hong Kong and the PRC maintained its lead as the largest revenue contributor, accounting for approximately 71.7% of the Group's aggregate revenue. The balance of the 28.3% comprises revenue contribution from markets in South East Asia, India and other markets.
OPERATIONAL HIGHLIGHTS
Hong Kong and the PRC markets
Customer demand remained vibrant. Led by the industrial segment, all product segments turned in strong performance. In addition, the Group also benefited from the ongoing expansion from the 3G market in the PRC.
In the current year, there was addition of some new product lines while other product lines were eliminated. In response to the growing market demand for LED products, a new product line was added this year.
The Group continues to expand its reach into the PRC market through its network of more than 10 offices in the PRC. In particular, the inner cities provide good growth opportunities where manufacturing activities are picking up speed.
South-East Asia, India and Other markets
Revenue from the South-East Asian market accounted for about 20.6% of the Group's total revenue. In this region, the Group has a different business model that caters mainly to the needs of contract manufacturers. In FY2011, contribution from this region was lower due to reduced activities in the contract manufacturing industry.
This year, the Group expanded into the Indonesian market. The outlook for this market is promising in view of its size and population. Despite its recent entry, the Group has already established strategic relationships, paving the way for it to tap into new business opportunities in the country.
New Product Lines Added
A total of seven new product lines were added and four product lines were terminated this year. The new additions to the Group comprise:
- Trinamic
- Samsung LED
- Rockchip
- GLead
- Digital Identification
- MOSO
- Mitsubishi Electric
Research and Development Activities
FY2011 saw the launch of the Group's first infant care product – the Intelligent Baby Monitoring Mat. Incorporating the state-of-the-art fiber optic sensing technology, this product has been designed to detect normal breathing cycles, apneic episodes, movements and abnormal breathing patterns in new born babies. Being one of the world's pioneer technologies, the Intelligent Baby Monitoring Mat was voted as an innovation that breaks with conventional processes in creative ways. It was one of the twelve finalists in "The Wall Street Journal's Asian Innovation Awards 2011".
This product is presently sold by distributors in various Asian markets. The research and development team is also working on enhancing the capabilities of this product and expanding its usage to address a broader spectrum of needs in the healthcare industry.