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.¡¨
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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