Airlink Communication announces the roll-out of Xiaomi TVs; contract with ACER

In its latest analyst briefing session, Airlink Communication Limited (AIRLINK) announced that it received the go-ahead from a Chinese team for the production of Xiaomi TVs during their visit last week. Production is expected to begin after semi-knocked-down (SKDs) arrive and will roll out by late November or early December. The total market size for TVs in Pakistan is 800,000 units, with an average price of US$400, according to brokerage house Topline Securities.

During the corporate briefing session, management also highlighted that the company has secured a contract with ACER to launch laptops and tablets by February-March 2025. The capital expenditure is expected to be as modest as $500,000 or PKR 139.5 million, while the average selling price will be no more than PKR 100,000.

Gross margins for TVs are projected to be 15-18%, while ACER laptops are expected to be 14-15%. The net margin for TVs is estimated at 7-8%, with some variability for laptops.

The company is in close talks with the government to develop export-led strategies to boost mobile phone utilization and lower costs. While capacity utilization currently hovers around 30-40%, management expects it to reach 60% to meet export demand. The company also revealed that it is negotiating with several brands to launch 50-60 retail stores in 2025.

Company reported a profit of PKR 129.7 billion in FY24

Airlink Communication Limited (AIRLINK) posted revenue of PKR 129.7 billion in the fiscal year 2023-24 (FY24), as opposed to PKR 36.9 billion in the same period last year. This translates into a profit of PKR 4.6 billion (earnings per share PKR 11.7/share), up 381.6% compared to last year. The company announced the results in a corporate briefing session held on Thursday.

The management reported that the company had imported two Xiaomi Electric Vehicles (EVs) units to assess customer preferences and determine price points before launching them in Pakistan. The cars will initially be showcased in Karachi and Lahore public malls.

The management declared unequivocally that no decision had been made to introduce EVs into Pakistan. If Airlink decides to enter the EV business, it will start with distribution and assembly before moving to production, which will require approximately $500-600 million in capital expenditure and take at least two years to complete.

On the tax front, the company declared that it benefits from exemptions for 2025. However, its wholly-owned subsidiary, Select Technologies, is liable to pay 29% corporate tax and 10% super tax.

Going forward, management was optimistic about the outlook as it intends to expand its product base by offering Xiaomi TVs, ACER laptops, and Xiaomi EVs.