(Hong Kong, October 7, 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 annual results for the year ended June 30, 2002. The Group・s profit attributable to shareholders rose by more than 143% to HK$38,408,000 (2001: HK$15,798,000) as a result of the substantial growth in its manufacturing business.

The Group recorded an audited consolidated turnover of HK$747,281,000 (2001: HK$804,210,000). The decrease in aggregate turnover was mainly due to the trading operation, which contributed comparatively lower margins, being inevitably dampened by the sluggish global economy. Earnings per share for the year amounted to HK12.8 cents (2001: HK5.3 cents). The Board has recommended a final dividend of HK5.0 cents (2001: HK1.5 cents) per share. Together with the interim dividend of HK2.0 cents (2001: nil) per share, total dividend payment for the year under review will amount to HK7.0 cents (2001: HK1.5 cents) per share.

Mr. Hui Sai Chung, Chairman of Ngai Hing Hong said, :It was a year filled with challenges and business opportunities for the Group with overall economic conditions being adversely affected by the persistent global economic downturn and the slowdown of the U.S. economy. However, building on the establishment of an experienced management team, solid foundation, clearly-defined business strategies and sound financial position, the Group experienced steady growth. With the contribution of the Group・s manufacturing business, our quality products and services, and the implementation of effective cost control and cash flow management measures, we are delighted to report a surge in profit, more than doubling that of previous year despite the difficult economic environment.;

During the year under review, the performance of the manufacturing business was very encouraging as a result of the Group・s commitment in recent years. Due to the increasing market demand for colourants and engineering plastics, the Group・s manufacturing business reported a surge in turnover which accounted for a substantially higher portion of aggregate turnover. Additionally, the higher gross profit margin in the manufacturing business contributed to the rise in the Group・s overall gross profit margin.

In line with its ongoing commitment to providing quality products and meeting the specific needs of its each premium customers, the Group produced customized and cost-effective products with value added services, including tailor-made engineering plastics, which were well-received by the market. Additionally, the Group managed to expand and extend its customers base through its well-established sales network in major cities in China including Dongguan, Guangzhou, Shanghai, Qingdao, Chengdu and Tianjin. Its clientele also covers a wider range of manufacturing industries including home appliance, toy, automobile, electronics and consumer products, etc.

During the year under review, the Group implemented a series of measures to face the anticipated difficult market environment. The Group・s management streamlined its operational work flow to achieve a higher gross profit margin. At the same time, the Group continued to pursue prudent cash flow management practices by shortening the recovery period of its account receivables, resulting in improved liquidity and substantial finance expenses reduction. The Group also tightened its credit control policy and successfully reduced its bad debts. Hence, its financial position has been further enhanced.

Mr. Hui said, :As a result of the Group・s consistent pursuit of sound business strategy, we began to see the benefits during the year. Seeing the satisfactory results of the manufacturing business, we will continue to enhance our competitiveness with a continuous commitment to research and development and to increasing the product range to meet the needs of customers.;

To cater for the increasing volume of production orders from local customers, the Group leased an additional plant at Tai Po Industrial Estate in Hong Kong to increase its production capacity. Leading-edge equipment and production machineries and high-volume production lines will be installed in the new plant for the manufacturing of products with higher technical requirements, shortening delivery time for local customers and saving delivery costs. The installation of production machineries in the new plant will be completed in two phases. The first phase is expected to be ready for production by the end of 2002 while the second phase is expected to commence production in early 2003.

Meanwhile, the new plant in Shanghai, which will replace the existing leased plant, is under construction and is expected to be completed by the end of 2002. Production capacity will therefore be expanded to meet the growing market needs for its products.

In view of China・s positive prospects after its entry to WTO, the Group took its first step into the trading of plastics materials in China with the establishment of Ngai Hing (GZFTZ) Trading Co. Ltd. in Guangzhou Free Trade Zone in May 2002, fully capitalizing on the Group・s established customer base. If this pilot scheme receives positive responses, a new source of income is anticipated for the Group.

Leveraging its extensive experience in the plastic materials and colourants business, the Group is negotiating with established building materials companies about the application of plastic materials and colourants for their production of plastic building materials. The Group expects that such market penetration will create another stream of income.

Mr. Hui concluded, :Looking to the future, the Group stays highly positive to the market potential in China, where we anticipate continuous business opportunities leading to increasing demand for our products. We will continue to enhance our competitiveness through the provision of quality products and value-added services with continuing investment in research and development. We will also seek suitable opportunities to accelerate the Group・s growth, aiming to maintain our leading position in the market and to generate better returns to the Group and our shareholders.;

About Ngai Hing Hong Company Limited

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 colourants and engineering plastics for the plastic industry.