Ngai Hing Hong Announces 2003/04 Interim Results

Reports Turnover Growth of 10.5% to HK$500,188,000


(Hong Kong, March 10, 2004) -- Leading Hong Kong plastic resins and specialty colourants supplier Ngai Hing Hong Company Limited and its subsidiaries (the ¡§Group¡¨) (Stock code: 1047) announced its interim results for the six months period ended December 31, 2003.  

For the six-month period, the Group recorded a turnover of HK$500,188,000 (2002: HK$452,588,000), representing a growth of 10.5% over the corresponding period last year.  Profit attributable to shareholders amounted to HK$7,132,000 (2002: HK$20,102,000).  Earnings per share for the period amounted to HK 2.4 cents (2002: HK 6.7 cents).  The Board has recommended an interim dividend of HK 1.0 cent per share. (2002: HK 3.0 cents).

Mr. Hui Sai Chung, Chairman of Ngai Hing Hong said, ¡§During the period under review, the overall global business environment was dampened by the continuing slow recovery of global economy and the negative impact of the Severe Acute Respiratory Syndrome (¡§SARS¡¨) outbreak, which had inevitably affected the Group¡¦s business activities.  However, with the efforts of its experienced management, the Group implemented a series of flexible business strategies to boost its performance in the difficult market environment.  As a result, turnover for the first-half recorded an increase of 10.5% over the same period last year.  The improvement was largely due to the satisfactory growth in the sales of the Group¡¦s plastics trading business.¡¨

The Group has placed strong emphasis on developing its high profit margin colourants and engineering plastics businesses in recent years.  Coupled with the full operations of its Qingdao plant and the broadening of its major customer base as a result of the dedicated efforts of the Group¡¦s sales team, sales contribution from the northern China region grew as compared to the same period last year.  To cope with growing market demand, the Group substantially expanded its production capacities as its manufacturing plants in Shanghai and Hong Kong came into operation in 2003.  However, manufacturing overheads also increased, growing at a much faster pace than market demand, leading to a reduction in the Group¡¦s overall profit margins.  Nonetheless, the Group expects its profit margins to show substantial improvement in the foreseeable future.

Due to the extreme impact of SARS and the subsequent prudent ordering pattern of the Group¡¦s customers, the Group experienced a reduction in export orders in the first quarter of the current financial year.  However, with the adoption of a competitive pricing strategy by the Group and fallout of the SARS, sales in the second quarter surged and the trading business recorded a 12.9% growth in turnover over the corresponding period last year, despite the decline in profit margins of the Group¡¦s trading activities.

With regard to the PRC market, Ngai Hing (GZFTZ) Trading Co., Ltd., a subsidiary of the Group, started to generate revenue for the Group.  Looking forward, the Group will continue to develop its customer network in southern China, and has plans to set up representative offices in other major cities for further expansion of its trading business.

To make the best use of its enlarged production capacities, the Group will strengthen its sales and marketing efforts to expand its customer base and achieve better utilization of its production facilities in the second-half of the financial year, enhancing the cost effectiveness of its overall operations and production.

Mr. Hui concluded, ¡§The Group is highly confident in the PRC market as it is supported by favourable factors such as the PRC¡¦s accession to WTO and the Closer Economic Partnership Arrangement (CEPA) with Hong Kong.  By leveraging our well established foundations, quality products and services, the Group will actively explore and capture every arising opportunity so as to facilitate our business development.¡¨


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 plastics industry.

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