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）

(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.