Comba Announces 2009 Annual Results

Financial Highlights For the year ended 31 December

(31 March 2010 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 annual results for the year ended 31 December 2009.

During the year, attributable to the remarkable increase in the revenue from PRC mobile operators, the Group retained its strong growth momentum. Revenue surged 75.8% to HK$4,440 million while gross profit increased by 77.8% to HK$1,682 million. Profit attributable to shareholders increased significantly by 148.1% to HK$565 million, mainly because of the increase in revenue, steady gross profit margin and economy of scale. Basic earnings per share were 54.09 HK cents. The Board of Directors recommended payment of a final dividend of 12 HK cents per share (2008: 7 HK cents), of which 8 HK cents were ordinary dividend and 4 HK cents were special dividend, and the total pay-out ratio was 33% (2008: 26%, calculation based on number of ordinary shares issued as at 31 December 2008). The Group also declared a distribution of 1 bonus share for every 10 existing shares held by shareholders (2008: 1 bonus share for every 10 ordinary shares).

Mr. Tony TL Fok, Chairman and President of Comba, said, The Group experienced rapid growth in 2009. With the 3G network build-outs and continuous enhancement of the existing 2G mobile networks, the PRC telecommunication industry is entering the era of rapid network enhancement. Leveraging on the Group s advanced R&D and innovative technology, we successfully seized the ample opportunities brought about by these developments, continued to launch new products and solutions, and became one of the few major communication equipment and service providers for various landmark domestic projects, such as the World Expo 2010 Shanghai and the Wuhan-Guangzhou High Speed Rail Line. As such, we managed to achieve an outstanding performance for the year.

During the year, revenue generated from the PRC mobile operators increased significantly by 82.1% to HK$3,442 million and accounted for 77.5% of the Group s revenue. Revenue from China Mobile Group, China Unicom Group and China Telecom Group increased remarkably by 31.4%, 248.3% and 189.0% respectively. With the issuance of 3G licenses, the three mobile operators in the PRC substantially increased their investments for 3G network build-outs and network enhancements. Revenue generated from TD-SCDMA, WCDMA and CDMA2000 for network build-outs totalled HK$1,440 million. Comba continued to leverage on its leading product technologies, expanded the product portfolio for the global markets and developed new 3G products, thereby transforming 3G-related business to become an important growth driver for the Group.

Benefiting from the continuous 3G network build-outs, the antennas and subsystem business, for the first time, became the highest revenue generator for the year. Revenue from this business surged 68.9% and accounted for 32.1% of the Group s revenue. Revenue from wireless enhancement business increased by 37.7%, accounting for 31.0% of the Group s revenue. As a result of the high recognition of the products by the core equipment manufacturers in the international markets, revenue from the wireless accessbusiness increased significantly by 252.3%, accounting for 10.5% of the Group s revenue. Revenue from services, including consultation, commissioning, network optimization, project management and after-sales maintenance services, also increased by a significant 113.1% and accounted for 26.4% of the Group s total revenue.

The Group made several achievements in the international market and further diversified its customer base, thereby gaining a wider installed base for its products and solutions in the international market. In addition, the Group s business in India is expected to achieve significant growth with the anticipated issuance of 3G licenses in the country.

During the year, the R&D costs increased by 26.3% to HK$167 million (2008 : HK$132 million), representing 3.8% (2008 : 5.2%) of the Group s revenue. This was due to the Group s goal of expanding product portfolios for the global markets including the continuing development of new 3G and next generation network products and solutions, in addition to streamlining the manufacturing process for higher efficiency. In order to maintain its leadership position in the industry, the Group has to maintain an advanced R&D team at the current level. The Group s continuous investment in R&D allowed it to achieve significant accomplishments in intellectual property rights, having applied for over 530 patents as at the end of the year.

Mr. Fok said, At present, the number of mobile phone users in China exceeds 740 million, however, mobile phone penetration and network coverage in rural areas is far lower than that in urban areas. Thus, the Group will definitely benefit under the national policy of developing rural areas. Globally, 2G users continues to dominate however, the number of 3G users is growing rapidly. As such, the Group will adhere to its strategy of further optimizing 2G networks, seizing the opportunities from 3G and getting prepared for the LTE , and continue to invest more resources in R&D. With the global economy recovering coupled with the continuous healthy development of the telecommunication industry, we are optimistic towards the Group s future, and are preparing to launch a series of innovative wireless equipment which is expected to bring fruitful results to the Group.

Looking ahead, the Group will fully utilize its competitive advantages, enhance its R&D capabilities, expand its product portfolio, and continually improve its global sales and service network. We believe these factors will ultimately enable us to increase our market share and consolidate our leading position in the industry. We are confident about the global telecommunication industry and the Group will continue to expand into the overseas markets, with a focus on emerging and high potential markets, and strive to become the world s largest wireless enhancement supplier. Mr. Fok concluded.

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