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China mobile maker Bird posts 5% rise in Q2 net
China's top mobile maker, Ningbo Bird, posted 5.1% rise in earnings as cost cutting and an export drive overcame pinched margins.
China's top domestic mobile phone maker, Ningbo Bird, posted a 5.1 per cent rise in second-quarter earnings on Saturday as cost cutting and an export drive overcame pinched margins from tough competition.
An increasingly crowded cellular phone industry in China -- the world's biggest market with more than 300 million subscribers -- could exacerbate price-based competition, analysts said.
But Bird, which said it overtook Motorola and Nokia to become China's top cellphone vendor in 2003, said sharply rising exports were providing some protection from the domestic competition.
Bird's net profit rose to 60.82 million yuan ($7.35 million) in the April-to-June quarter from 57.89 million yuan a year ago, Reuters calculations show based on previous figures from the company.
Second-quarter turnover fell 18.1 per cent to 2.14 billion yuan, Bird said in a statement on the Web site of the Shanghai stock exchange (www.sse.com.cn).
"Competition in the domestic market intensified, leading to a decrease in handset prices. Also, our sales fell as demand dropped due to official economic-cooling steps, and a global supply squeeze of some key components", it said in the statement.
Chinese handset makers emerged in the late 1990s to grab about half of the booming market. Bird is one of several domestic players trying to muscle into a market once dominated by the likes of Motorola, Nokia and Siemens AG.
Bird's homegrown peers include TCL International and Panda Electronics.
IT consultant Gartner expects handphone sales in China to exceed 70 million in 2004.
SPREADING ITS WINGS
Bird said exports surged 18.1 times in the first half compared with a year earlier, generating 15.5 per cent of the firm's revenues.
First-half earnings rose 4.1 per cent to 111.34 million yuan, while revenue fell 19.2 per cent to 4.65 billion yuan.
Gartner places Bird a distant third behind Motorola and Nokia in terms of handset sales in China, countering Bird's estimate it is the biggest seller. However, it did overtake Samsung Electronics in 2003, Gartner says.
Xu Lihua, president and general manager of Bird, told Reuters in February the company was re-focusing on exports.
Beijing is pushing domestic companies to carve out markets abroad to help local firms build global brands. Bird already exports handsets to Russia, India and Southeast Asia.
Xu said in February the company aimed to raise handset sales by two-thirds to 20 million units and quadruple exports to $200 million in 2004.
The company's yuan-denominated A shares, open to select foreign investors, closed flat at 12.25 yuan on Friday, outperforming a one per cent fall in the Shanghai stock market.
