SHENZHEN -- SinoHub, a contract designer and assembler of cellphones, said third-quarter net income climbed 55.3% from last year to $5.5 million.

Revenues for the period ended Sept. 30 grew 54.1% from last year to $55.8 million. Distribution sales increased 2.9% to $35.3 million, supply chain management services slipped $400,000 to $1.5 million, and contract manufacturing was up 42.9% sequentially to $19 million. Gross margin improved 340 basis points sequentially to 15.6%. Its contract manufacturing gross margins were 17.8%.

"Our strong third quarter sales results were led by record shipments and revenue from our custom design mobile phone contract manufacturing business. We produced approximately 320,000 handsets for the third quarter, up from 250,000 in the second quarter, with sales being strongest in Indonesia and India," said Harry Cochran, chief executive.

Sinohub raised its 2010 revenue guidance to $192 million from the prior guidance of $180 million, representing anticipated year-over-year growth of approximately 50% over 2009.

The company strategy is to grow its contract manufacturing business to over 50% of total sales. It also is looking to move toward more ODM work and away from EMS. SinoHub has a 77,500 sq. ft. manufacturing facility in Shenzhen for its custom design mobile phone business unit, where it recently added two assembly lines for a total of eight, including three high speed surface mount lines with production capacity of approximately 90,000 mobile phone motherboards per month.