Records a Net Profit Growth of 17.3%
(Hong Kong, March 19, 2002) - 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, 2001.

During the period under review, the Group recorded a turnover of HK$368.7 million (2000/01 interim: approximately HK$433.9 million). Profit attributable to shareholders was HK$12.2 million (2000/01 interim: HK$10.4 million), representing a growth of 17.3% over the previous corresponding period. Earnings per share for the period amounted to HK 4.07 cents. The Board has recommended an interim dividend of HK 2 cents per share.

As a result of the persistence of stagnant global economic conditions and the deteriorating U.S. economy in the aftermath of the 911 terrorist attacks, the Group¡¦s aggregate turnover recorded a fall as compared to the previous corresponding period. Nevertheless, the Group recorded an increase in profit, which was mainly attributable to the contribution of the colourant manufacturing business and the implementation of effective cost control measures.

Mr. Hui Sai Chung, Chairman of Ngai Hing Hong, said, ¡§Despite the unfavourable business environment and the fall in the aggregate turnover, the Group yet managed to report an increase in profit. Thanks to the dedication of our management team and procurement team, performance of our colourant manufacturing business and the Group¡¦s financial position have been enhanced. We will continue to actively develop engineering plastics and search for high value-added products to increase our competitiveness and generate better returns for the Group.¡¨

Through the Group¡¦s continuing commitment in the research and development, the Group managed to produce cost-effective and customized products, including tailor-made engineering plastics. The resulting responses from customers have been very encouraging. Gross profit margin for the colourant manufacturing business achieved growth as compared to the corresponding period of previous year. This was mainly due to the committed efforts of the procurement team in searching for lower priced raw materials and the fall in the price of crude oil.

The Group has continued its pursuit of prudent credit control, reducing bad debt and accelerating the recovery of account receivables. Hence, not only its liquidity has improved, but also its finance expenses have been substantially reduced.

Mr. Hui continued, ¡§With China¡¦s entry to WTO, we are confident that tremendous business opportunities will arise for our plastics trading and colourant manufacturing businesses. In view of this immense market potential, the Group plans to set up a new company in China to further expand the trading business.¡¨

Tsing Tao Ngai Hing Plastic Materials Co., Ltd., the joint venture formed by the Group and the Haier Group, commenced the colourant manufacturing immediately upon completion of its plant in June 2001, creating a new source of income for the Group. In future, to pursue further development in the northern part of China and expand production capacities, it has purchased a piece of land in Shanghai to build its own plant, replacing existing rented facilities. Construction of the new plant is expected to be completed by the end of 2002.

¡§Despite the weak global economic conditions, the business development of the Group will not slow down. Riding on our solid foundations, we will pursue further expansion in China and broaden our business activities to improve the Group¡¦s business performance.¡¨ concluded by Mr. Hui.

About Ngai Hing Hong

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 colour matching services, on the spot technical advice, to the supply of custom-made plastic colorants for the plastics industry.