Comba Announces 2008 Interim Results

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Revenue and Gross Profit up by 7.4% and 6.5% Respectively

International Business Records Significant Growth

Financial Highlights For the six months ended 30 June Unaudited
HKD'000
2008 2007 Change
Revenue 835,492 777,821 +7.4%
Gross Profit 343,697 322,639 +6.5%
Profit attributable to shareholders 71,970 76,386 -5.8%
Basic earnings per share (HK cents) 8.43 9.09 -7.3%

(8 September 2008 Hong Kong) Comba Telecom Systems Holdings Limited ( Comba or the Group , Hong Kong stock code: 2342), a leading wireless enhancement solutions provider, announced today its unaudited interim results for the six months ended 30 June 2008.

During the period under review, the Group achieved steady growth in both revenue and gross profit, which increased by 7.4% and 6.5% to HKD835 million and HKD344 million respectively. Profit attributable to shareholders for the first half of 2008 decreased by a slight 5.8% against the last corresponding period to HKD72 million. Basic earnings per share were 8.43 HK cents. The Board of Directors does not recommend payment of interim dividend for the six months ended 30 June 2008.

Mr. Tony TL Fok, Chairman and President of Comba, said, In the first half of 2008, we saw remarkable growth in international sales, which was an important profit contributor of the Group. Apart from expanding its overseas sales network, the Group also gained approved supplier status from a number of prominent global telecom operators, testifying to a wide acceptance of the brand and R&D technology of the Group in overseas markets. Together with the international business development of the core equipment vendors, we are confident that the Group could double the revenue from the international market in 2008, and expect the international business to become a major growth driver for the entire Group in the future.

Affected by the pace of restructuring of the telecommunications sector in Mainland China, the mobile operators delayed application of capital expenditure slightly. As a result, the revenue derived from China Mobile for the period decreased by 9.4% YoY and accounted for 58.8% of the total revenue of the Group. The revenue generated from China Unicom Group also slightly decreased by 3.0% YoY and accounted for 14.7% of the total revenue of the Group. The restructuring is expected to be completed within the 4th quarter of 2008 which will result in the introduction of another mobile operator in the market, after which, 3G licences might be granted to the operators. Three market operators will gradually increase their capital expenditure on wireless networks, thus Comba stands to benefit from the move.

International sales (including sales to PRC core equipment manufacturers) increased substantially by 115.8% to HK$139 million, representing 16.7% of the Group s total revenue, which was attributable to significant growth in sales to core equipment manufacturers and satisfactory growth in global sales. In addition, the Group enhanced its recognition with the major operators and vendors, gaining approved supplier status for world-renowned telecom carriers such as AT&T, Vodafone and Telefonica.

Revenue from wireless enhancement business for the period decreased by 24.4% against the last corresponding period and accounted for 39.8% of the Group s total revenue. Antennas and subsystems business brought in a significant 36.9% more revenue for the period against the last corresponding period and accounted for 34.4% of the Group s total revenue. The increase was attributable to the growth in sales of newly launched high-end products. As for the performance of the wireless transmission business, its revenue increased by 36.9% as compared with the same period last year and accounted for 3% of the Group s total revenue. Revenue from services, including installation services, network enhancement services and after-sales maintenance services, also increased by a significant 73.6% and accounted for 22.8% of the Group s total revenue. The surge was owed mainly to the increasing numbers of equipment and larger coverage areas.

Mr. Fok said, We expect that our three product lines can benefit from the market expansion. For the wireless enhancement business and antennas and subsystems business, there are certain innovative products which have already generated revenue for the Group. Wireless transmission solutions such as DMS is now showing solid returns for the growth and we expect this growth trend to continue. Besides, services will eventually grow to become one of the key revenue drivers to our Group.

We are enthusiastic yet deliberate towards the development of the wireless telecommunications industry. In the future, Comba will strive to expand its international market share and strengthen its global presence by adopting a balanced and carefully planned growth strategy, so as to bring rewarding returns to shareholders. Mr. Fok concluded.