China Fiber Optic 9 months 2011Revenue Surges 52.5%

China Fiber Optic 9 months 2011Revenue Surges 52.5%

HONG KONG, Nov. 15, 2011 /PRNewswire-Asia/ --

Highlights

China Fiber Optic Network System Group Ltd. ("China Fiber Optic" or the "Company" and, together with its subsidiaries, the "Group"; stock code: 3777) today announced its unaudited revenue for the nine months ended 30 September 2011 (the "period under review").

During the period under review, the Group's unaudited revenue surged 52.5% to RMB905.4 million compared with the corresponding period of last year (2010: RMB593.6 million). Sales of fiber optic patch cords accounted for about 97% of the Group's total revenue. Domestic sales of fiber optic patch cords grew 119.0% to RMB831.5 million compared with the corresponding period of last year as telecom network operators set up aggressive goals to accelerate their reach to broadband subscribers through fiber optic connection technology, and that broadcast and television network operators focused on upgrading their transmission networks in preparation for the "integration of three networks". 

Mr. Randy Hung, Executive Director and Chief Financial Officer of China Fiber Optic, said, "As the fiber optic network is developing rapidly, the Group's fiber optic patch cords benefit from the huge demand. In this light, before the end of the year we will increase our production capacity of fiber optic patch cords from 9 million sets to 12 million sets and have preliminary plans next year to further increase production capacity by 50% to 18 million sets. Additionally, we will also raise our production capacity of soft optical cables from 13,000 km to 130,000 km to meet the needs for fiber optic patch cords."

While domestic sales are our major source of revenue, overseas sales are becoming strong. The performance in the overseas market is expected to improve gradually in the fourth quarter.

Great Potential in Fiber Optic Patch Cords

Fiber optic patch cords are one of the key components of fiber optic networks widely used in telecom networks, broadcast and television networks and special communication networks. According to CCID, the global demand for fiber optic patch cords reached 243 million sets in 2010, with a market size of US$2.25 billion. CCID expects the global market to grow to US$4.15 billion in 2014 at a CAGR of 17%, whereas the China market will likely reach RMB5.73 billion at a CAGR of 19%. From 2006 to 2014, China's FTTx (fiber to the home) equipment market is expected to grow at 163%.

China Fiber Optic is the largest manufacturer of fiber optic patch cords in China in terms of sales volume and production capacity. Sales of the Group's fiber optic patch cords accounted for 18.6% of China's total in 2010, exceeding the combined market share of its two largest competitors in the country. The Group currently targets the fiber optic patch cord market in China by providing customized products and solutions to telecom network operators, broadcast and television network operators and special communication network operators.

In addition, telecom network operators are accelerating their reach to their fiber optic network users, while broadcast and television network operators focus on upgrading their transmission networks in preparation for the integration of the "integration of three networks". The Group's fiber optic patch cord business growth will be driven mainly by the strong increasing demand for FTTx, the integration of three networks, 3G wireless communication and special communication networks. In February 2011, China Telecom announced its "Broadband China, Optical Network City" strategy to increase FTTH subscribers by 30 million in 2011, an increase of 300% from the total subscribers over the past five years, and it will build a fiber access network in all cities of China over the next three years.

In order to meet the huge market demand, the Group strives to expand the production capacity after its listing whilst continuing the focus on the development and sales of fiber optic patch cords to cope with market trends and fulfill customers' technical requirements with customized products and solutions.

About China Fiber Optic Network System Group Ltd.

China Fiber Optic Network System Group Ltd. is the largest manufacturers of fiber optic patch cords in China. The Group produces and sells a comprehensive portfolio of fiber optic patch cord products used in a variety of applications in the communications industry. According to CCID, sales of the Group's fiber optic patch cords accounted for 18.6% of China's total in 2010, exceeding the combined market share of its two largest competitors in the country. Please visit Company's website at www.chinafiberoptic.com.

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