Financial Highlights (unaudited)

        (19 August 2016, Hong Kong) – Comba Telecom Systems Holdings Limited (“Comba Telecom” or “the Group”, Hong Kong stock code: 2342), a global leading wireless solutions provider, today announced its unaudited interim results for the six months ended 30 June 2016.

        In the first half of 2016, a deceleration in macro-economic environment has been affecting the global economy, and the overall investment intensity has been hampered by the tightened capital spending by most global mobile network operators. As a result, the Group’s revenue decreased by 7.4% to HK$3,099 million. Despite recording a write-off for obsolete inventories, gross profit margin increased by 1 percentage point to 30.1%, mainly because of higher efficiency through optimizing operation and manufacturing processes. Due to the reduced finance costs and taxation charge, net profit of the Group increased by 3.4% to HK$113 million. The Board recommended the payment of an interim dividend of HK$1.5 cents per ordinary share (2015: HK$1.5 cents), with a dividend payout ratio of 29.6% (2015: 25.4%), and proposed to distribute one bonus share for every 10 existing ordinary shares held by the shareholders.

        Mr. Zhang Yuejun, Vice Chairman and President of Comba Telecom, said, “Although the uncertain global environment persists, more companies are attempting to capitalize on lnternet-of-things (IoT) initiatives in the trend of ‘Internet Plus’ to achieve strategic competitive advantage, thus driving sustained capital expenditure and upgrading networks to support a higher volume of mobile data traffic and continued 4G migration. This has contributed to the continued development of the telecommunication industry. While strengthening the existing core business areas, we continue to build strengths in key capabilities to underpin the new business areas.”

        During the period, revenue from 4G projects surged by 24.8% to HK$1,343 million, accounting for 43.3% of the Group’s revenue. Revenue generated from China Mobile Group decreased by 20.7% to HK$818 million, accounting for 26.4% of the Group’s revenue. Revenue from China Unicom Group increased by 16.8% to HK$942 million, accounting for 30.4% of the Group’s revenue. Revenue from China Telecom Group decreased by 26.3% to HK$581 million, accounting for 18.7% of the Group’s revenue. Revenue from enterprise customers, including mainly China Tower Corporation Limited (“China Tower”), increased by 24.9% to HK$154 million and represented 5.0% of the Group’s revenue. China Tower is a new customer of the Group and the Group expects the revenue contribution by China Tower will be increasing gradually in the future. On the international front, revenue generated by international customers and core equipment manufacturers increased by 1.3% to HK$604 million, accounting for 19.5% of the Group’s revenue, and was mostly offset by the decline in the revenue generated by core equipment manufacturers.

        Due to a slowdown in product demand, revenue generated from the antennas and subsystems business decreased by 9.5% to HK$1,495 million, representing 48.3% of the Group’s revenue. Revenue generated from the wireless enhancement business decreased by 7.4% to HK$556 million, accounting for 17.9% of the Group’s revenue. In view of mobile network operators’ increasing focus on densifying networks to manage rising mobile data traffic consumption, and due to the positive impacts driven by mobile network enhancement phase, the Group expects that this business sector will improve in the second half of 2016. In respect of the wireless access and transmission business, benefited from the increase in revenue contribution from Small Cell and microwave businesses, revenue increased by 7.2% to HK$150 million, accounting for 4.8% of the Group’s revenue. Revenue from services dropped mildly by 5.7% to HK$898 million, accounting for 29.0% of the Group’s revenue.

       In order to meet different customers’ needs, the Group’s business will focus on three areas, including public networks of mobile network operators, enterprise network construction and information service, as well as the area of loT. In respect of public networks of mobile network operators, the Group is engaged in the development of diversified and multi-mode multi-frequency 4G products, and has further expanded its antenna portfolio in order to address the difficulties in capacity and coverage expansion. As a pioneer in RF technology, the Group’s 5G R&D works with a major focus on the technology of active array antennas achieved a breakthrough.

       As for in-building and community coverage, the Group’s in-building distribution system solution offerings have been proliferating to encompass MDAS (Multi-Service Fiber Optic Distributed Access System) and DAS (Distributed Antenna System) solutions, amongst others, to guarantee improved coverage in difficult indoor environments and high capacity of hotspots. The Group offers an intensive new coverage solution for residence community by capitalizing on MDAS products. Besides, Small Cell technology is one of the core technologies of the next generation of mobile networks. Mobile network operators are exploring more new services and solutions that can be enabled through Small Cell deployment. During the period, the Group has succeeded in a tender of China Mobile Group’s subsidiary. The Group expects the demand for wireless access products will be strong in the second half of the year.

       In respect of enterprise network construction and information service, regional communication resolutions have emerged as another viable approach to enterprise network construction to improve connectivity in a cost-effective manner. In addition, the increasing investments from China government and the market in smart city projects will drive the demand for wireless connectivity solutions, thereby benefiting the wireless business of the Group. The Group will also render information services concerning railway and internet-of-vessels. Such businesses involving IoT, big data analysis and cloud platform will expand the scope of business for the development of the Group.

       In respect of IoT, all things are becoming smarter and connected to the internet, enabling greater communication and new data-driven services based on increased analytics capabilities. Most of the current wireless networks may not be sophisticated enough to enable developers to prepare themselves for comprehensive IoT applications. As a leading player in wireless solutions, the rapid growth of the IoT will create enormous opportunities and growth potential to the Group. In alignment with the development of IoT by mobile network operators and building on the existing sizable GSM access deployment, the Group will develop an IoT system enabling long distance access and large number of user access for the NB-IoT, allowing a sustainable opportunity for the development of the Group’s access system.