SCUD 1399

SCUD 1399

Postby winston » Mon May 19, 2008 9:16 am

SCUD turns up the power
Mandy Lo
Monday, May 19, 2008

Rechargeable battery pack manufacturer SCUD (1399) has recovered from a fire at its production plant in Fuzhou and is now back to full capacity.

To expand its customer base, the company has entered an agreement to acquire Chaolitong, one of its largest rivals, for up to 245 million yuan (HK$271 million). The acquisition is expected to be completed by the end of this month.

After the acquisition of Chaolitong, SCUD will own 20 percent of the rechargeable battery pack market in China, from the current 12 percent, said chairman Fang Jin.

Fang said workers often have to commute for days in China, and this helps drive demand for rechargeable batteries.

The acquisition, which has been planned for a long time, is expected to bring an immediate synergy effect, reducing production costs by 5 percent to 10 percent, he said.

The deal is expected to help SCUD penetrate different market segments, enabling the company to provide batteries for more cellphone models.

Fang said the companys products would be marketed under the SCUD and Chaolitong brands.

SCUD would focus on the middle- and high-end market in the coastal region of eastern China while Chaolitong would target the lower end of the market in second- and third-tier cities.

Our sales network will increase to 50,000 distribution channels after the acquisition, from 35,000 as at the end of 2007, said Fang.

Rechargeable batteries for mobile phones contributed to 74.2 percent of turnover last year, the rest comin
g from rechargeable batteries for notebook computers, digital cameras and other portable electronic devices.

Fang is optimistic about the rechargeable battery business for notebook computers. The sector is expected to grow rapidly in the coming years because notebook computers will become much more popular as prices go down, he said.

The firm listed in the Hong Kong in December 2006, but less than six months later its only production plant in Fuzhou was badly damaged by fire. A machinery short circuit caused the fire, said Fang. There was no loss of life.

In its annual report for last year, the company states that within two weeks of the incident, the supply of goods to the market resumed and its export operation were back at full operations within a short period.

The total direct loss amounted to about 218.1 million yuan and SCUD has claimed compensation of 52.5 million yuan from insurers, said Fang. He added that employee training has been strengthened to avoid accidents in the future and the company is now covered by a more comprehensive insurance policy.

SCUD reported 2.6 percent growth in turnover to about 961 million yuan last year.

However, net profit slumped 90.3 percent to 15.5 million yuan from 160 million yuan because of the blaze.

Excluding the one-off losses from the fire of 164.6 million yuan, the company recorded 12.4 percent year-on- year growth of net profit to 180 million yuan.

The core businesses of the company include the marketing and distribution of products under its own SCUD brand, which accounts for 64.1 percent of turnover.

Another 33.8 percent is made up by its original equipment manufacturing business, which involves supplying rechargeable batteries to major clients such as Lenovo (0992), Huawei, ZTE (0763), UT Starcom, Sangfei, Hisense and Haier (1169) under their brand names
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: SCUD 1399

Postby winston » Mon May 19, 2008 9:18 am

Image boost
Monday, May 19, 2008, The Standard

Fang Jin, chairman and co-founder of SCUD Group (1399), started his career in the telecommunications industry at the age of 18 and has more than 20 years of experience to back his decisions on communication products.

Before the founding of SCUD in 1997, he set up a manufacturing plant for rechargeable batteries with partners such as Lin Chao, the present vice chairman.

In China, SCUD has the largest market share in rechargeable batteries, and in December 2006 became the only listed player.

Before acquiring Shenzhen-based competitor Chaolitong, SCUD owned 12 percent of the entire rechargeable battery market in China and it currently commands 30 percent to 40 percent of the middle and high-end market.

Fang revealed plans to boost production capacity by 190 percent to 90 million batteries.

With the first self-owned production plant expected to be completed in late this year, the total production capacity will reach 100 million units and will be enough to support the production demand in 2009, 2010 and 2011. Every year SCUD invests about 30 million yuan (HK$33.46 million) to further enhance its brand image.

Fang said the company has boosted its nationwide network and renovated some of its display counters.

Since last year, it has tried to build a more unified brand image.

SCUD plans to complete the renovation of about 4,000 display counters in several phases throughout this year and the next.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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