Trading Update

    RNS Number : 7595Y
  EBT Mobile China PLC
  10 July 2008
   


    10 July 2008

    EBT Mobile China plc
    ("EBT", "Company" or the "Group")
    Trading Update

    EBT Mobile China plc (AIM: EBT), a leading China-based retailer of mobile phone products and services, announces an update on its
trading performance for the six months to 30 June 2008, ahead of the expected announcement of its interim results in September 2008.  

    The Group has delivered an overall improved performance in the period, successfully focusing on growing margins and improving efficiency
whilst expanding its retail footprint. Significantly, EBT generated a modest adjusted net profit* during the period. Additionally, EBT
improved gross margins by approximately 10% to approximately 12% in the first half of 2007 compared to the equivalent prior year period.
Revenues in the first half were approximately RMB 300m (1H 2007: RMB 317m). Revenue and new store openings have been slower than originally
expected due to a number of adverse factors outside of the Company's control. Despite those challenges, the Company remains well positioned
and expects to post a modest full year adjusted net profit in 2008.

    First half 2008 highlights include:

    *     EBT generated a modest adjusted net profit in H1 2008*, and is on track to generate a modest adjusted net profit* for the full
year 2008 
    *     Gross margins improved by approximately 10% to 12% in the first half
    *     Non-phone sales and service revenues increased substantially, contributing to EBT's overall higher margins

    EBT's expected move to profitability will have arisen as a result of a number of operational improvements including: a strategy focused
on gross margin rather than volume-driven discounting; appropriately trained and incentivised local management personnel providing quality
focused customer solutions, value added services, aftersales and category management; and development of the Group's management information
system with improved supply chain management. These enhancements have generated progressive business activity in the face of tough market
conditions. The increase in non-phone sales and service revenues, contributing to the higher margins, is testament to this.

    Factors which effected top-line growth included several well-publicised natural disasters in China during the first half of 2008.
Additionally, changes in the mobile phone operating market have been slower than expected. Over-estimates of growth by handset manufacturers
have led to their overstocking of inventory resulting in their delaying introducing higher margin new models into the market. In the absence
of new models, pricing on existing handsets has become more competitive.

    Management believes that whilst there are temporary challenges, the China mobile phone market opportunity remains one of extremely high
growth. EBT continues to selectively grow its store footprint in what is the world's largest wireless telecommunications market and leading
wireless providers are set up to provide 3G, the introduction of which will bring the industry to the next stage and provide substantial
additional growth opportunities in due course.

    Further to the announcement made in December 2007, the Company remains in talks with the party from which it received an initial
approach.  While discussions are ongoing and constructive, there can be no certainty of a corporate transaction taking place.  A further
announcement will be made as appropriate.

    Zhang Ge, CEO of EBT said, "Despite a challenging first half, EBT has expanded the number of outlets and has improved margins.  We
expect to achieve profitability in 2008. The Chinese mobile phone market is the largest in the world and continues to hold substantial
growth opportunities, such as the launch of 3G. The Board believes that EBT, as one of the leading specialised mobile phone retailers in the
affluent East Region of China, is well placed to capitalise on those opportunities."

    *     adjusted items include share-based payments, exchange difference, financial guarantee, contingent liabilities, investment loss in
a joint venture and acquisition costs.  

    The contents of this Press Release may contain forward-looking statements which can be generally identified as such because the context
of the statement will include the words such as EBT "expects", "should", "believes", "anticipates" or words of similar import. Such forward
looking statements are subject to certain risks and uncertainties including the financial performance of EBT which could cause actual
results, performance or achievements of EBT to differ materially from any future results, performance or achievements expressed or implied
by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. 


    For more information contact:
    Terry Garrett / Stephanie Badjonat / John Moriarty
    Weber Shandwick Financial                                                                                                    020 7067
0700

    Aubrey Powell / Giles Stewart /Mark Lander
    Panmure Gordon (UK) Limited                                                                                                020 7459
3600

This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
TSTIIFSDDTIILIT