(July 10, 2001 - Hong Kong) - Ngai Lik Industrial Holdings Limited ("Ngai Lik" or "the Group"; stock code: 332) announced its annual results for the year ended March 31, 2001. During the period under review, turnover was HK$2,947,967,000, representing an increase of 8.2% over last year. Profit attributable to shareholders was HK$190,289,000, showing an encouraging increase of 24.1% over last year.
Commenting on the Group's performance in electric products, Mr. Lam Man Chan, Chairman of Ngai Lik, said," Notwithstanding the worldwide shortage of manufacturing components and the rise in material costs during the year under review, the EMS division still attained a record ever high turnover and profit, demonstrating the flexibility as well as capacity of the Group to face challenges over times. Turnover increased to HK$2,947,967,000 and gross profit increased by 20%. The increase in turnover was mainly attributed to the strong sales of home audio products in both the U.S. and Europe. The diversification of the business in different geographical markets is a key market strategy of the Group to maintain stability of results. Sales to the North American market received a boost with the increased volume of home audio products and sales to North American improved by 11%. The North American segment accounted for 60.6% of total sales of the division. The continued success was attributable to our commitment to the provision of high quality goods at affordable prices."
The Group takes pro-active steps in expanding its market reach. During the period under review, Ngai Lik successfully solicited three renowned electronics companies in Germany and Korea.
As a pioneer in electronics manufacturing, the Group introduced numerous new models during the period under review. The new digital camera was well received by the market and the new generation of portable DVD player is also in the pipeline. This is solid proof of the Group's market insight and its R&D capability.
There is a high degree of vertical integration in the manufacturing process of electronics products from self-supply of electricity, components manufacturing to SMT, mould-making, spray painting and silk screening and printing processes. During the period under review, production capacity was increased through the addition of more than 20 plastic injection machines, 2 sets of power generators and certain SMT machines.
In view of the intense competition in the motorcycle engine market, the Group has shifted its focus to design and sell assembly sets of motorcycles. Since the intentional change in business direction, the sales turnover of this division has dropped 33.7% to HK$300,087,000. Although the motorcycle engine division is facing a difficult year, the Group still recorded a profit of HK$42,715,000.
"We believe that this production shift should be beneficial to the Group in the long run. To cope with this shift, we will construct a new plant with a gross flat area of approximately 20,000 sq.m. With the expected completion of Phase One of the construction in Dongguan, the production capacity of motorcycles is expected to increase from 4,000 sets to 20,000 sets per month. The first production line will commence operation by the third quarter of 2001." Mr. Lam explained.
With our successful branding strategy, our own brands "Tontse" captured a significant share in the middle and upper-middle end market. In the international market, our products enjoy distinct price advantage and our initial markets are Argentina and Indonesia.
In future, the Group will focus more on the development of new generation products such as new models of digital cameras, MP3 embedded CD players and internet DVD players.. Aggressive marketing strategies will help in promoting the two proprietary brandnames, "Aistar" and "Jyoto".
The Group will also exert efforts in promoting the Original Equipment Manufacturing (OEM) and the Original Brand Manufacturing (OBM) businesses.
With regard to the motorcycle division, the Group will focus on enhancing quality, manufacturing capacity, image and production flexibility in the coming year. Apart from the existing four-stroke 100cc, 125cc, 150cc and 175cc engines, whole sets of motorcycles will be one of the profit generators.
With the China's accession to WTO, the directors believe that the motorcycle market in the PRC will boom. In this regard, the Group will further explore the PRC market to secure a large market share.
Mr. Lam concluded," 2001 is the 25th anniversary for Ngai Lik. Looking ahead, the Group's two business divisions are each executing business plans that emphasize a combination of increasing marketing share of existing and new customers, as well as new products introduction to penetrate new market segments. While the current economy in North America is undergoing a period of uncertainty, we are confident that our diverse spread of product range and geographic markets will deliver solid result in the coming financial year."
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Company Background
Ngai Lik is principally engaged in the manufacture and sales of a wide variety of home audio, digital and multimedia products. In addition, the Company also designs and sells motorcycles and motorcycle engines. It has been listed on the Stock Exchange of Hong Kong Limited since 1992.
For further information, please contact:
iPR Asia Limited
Venus Lau/ Callis Lau/ Ellen Zee
Tel : 2136 6183/ 2136 6952/ 2136 6184
Fax : 2136 6068/ 2136 6118
E-mail : info@iprasia.com.hk
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