NGAI HING HONG ANNOUNCES 2000/01 INTERIM RESULTS
UPSURGE IN TURNOVER TO HK$ 433.9 MILLION
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(HONG KONG, March 21, 2001) -- Leading Hong Kong plastic resins and specialty colourants supplier Ngai Hing Hong Company Limited and its subsidiaries (the "Group") (Stock code: 1047) today announced its interim results for the six months ended December 31, 2000. The Group recorded a turnover of approximately HK$433.9 million, a significant growth of about 37.8% as compared to the same period of the previous year. Profit attributable to shareholders amounted to HK$10,416,000, as compared to HK$17,830,000 in the previous corresponding period.
During the period under review, earnings per share was 3.47 HK cents (1999/2000 interim EPS: 5.94 HK cents). To retain more resources for future development, the Board of Directors has recommended not to pay an interim dividend.
Mr. Hui Sai Chung, Chairman of Ngai Hing Hong said, "Though we faced the pressure of surging crude oil price and Hong Kong¡¦s export industry suffered from the slowdown of the U.S. economy since the fourth quarter of 2000, we managed to achieve satisfactory growth in the turnover of both trading and manufacturing businesses. It was mainly attributable to the leadership of our experienced management and the dedication of our sales team who ensures the provision of comprehensive and quality services to customers. Our customer base has been successfully expanded during the period."
The adverse effect to the local export industry inevitably led to the decrease in selling price of plastic resins and the gross profit margins of trading of plastic materials dampened accordingly. The gross profit margins of manufacturing operation also decreased due to the increase in fuel expenditure under the crude oil price pressure and the keen competition in the plastic industry.
The trading of plastic materials recorded 8.6% growth in sales volume and 28.6% growth in sales value over the corresponding period in the previous year. The Group also recorded a satisfactory performance in the manufacturing business. In particular, turnover of its operations in the eastern part of the People¡¦s Republic of China (the "PRC") was more than double compared with the previous corresponding period.
In view of the increasing demand for colorants in the northern part of the PRC, the Group is actively establishing its threshold in the area. In October 2000, the Group entered an agreement with Haier Group ("Haier"), a well-established and renowned enterprise in the PRC, to form a joint venture named Tsingtao Ngai Hing Plastic Materials Co., Ltd. ("Tsingtao Ngai Hing") with an initial investment of HK$15 million.
Ngai Hing Hong holds 85% interest in Tsingtao Ngai Hing, while Haier holds the remaining 15%. Tsingtao Ngai Hing will principally engage in the development, production and sale of engineering plastics, colour pigment, pre-colour and masterbatches. The annual production volume is expected to reach 2,100 tons. Construction of the new plant for the joint venture is expected to be completed in the second quarter of 2001.
Mr. Hui said, "Through this joint venture, the Group not only establishes a stable and sustainable partnership with Haier, but also strengthens its production capacity and distribution network in the PRC. We see this joint venture as our footfold to open up the northern market, and expect it to further expand the Group¡¦s client base and become another income stream for the Group."
"During the period, the Group has deployed a great deal of effort to strengthen our relationships with customers. We plan to set up liaison offices in Shenzhen and Shunde to provide front-line technical consultancy services to customers in order to respond in a more timely manner to their enquiries and needs. We will establish liaison offices throughout the PRC upon the proven success of this pilot implementation," concluded by Mr. Hui.
Ngai Hing Hong provides a total solution to plastic products manufacturers with services and products ranging from plastic resin (including polymers and engineering plastics) selection, complementary computerised color matching services, on the spot technical advice, to the supply of custom-made plastic colorants for the plastic industry.
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