(December 18, 2001 - Hong Kong) - Ngai Lik Industrial Holdings Limited ("Ngai Lik" or "the Company"; stock code: 332) today announced its interim results for the six months ended September 30, 2001. During the period under review, the Company has strengthened its operations on all fronts with an impressive improvement in its gross profit margins and its cash flow position.
The Company was able to sustain an encouraging net profit of HK$122,838,000 and net profit margin of 7.5% despite the combination of an intense market environment, the tragic 911 incident and the global economic slowdown. Even under so much pressure, its Electronics Manufacturing Services ("EMS") division continued to perform steadily to account for 94% and 95% of turnover and operating profit respectively. As consumers became hesitant when placing orders, the delivery schedule was pushed back beyond the interim date. As a result, this led to a decline in sales of 8.7% during the period under review, with turnover of EMS amounting to HK$1,538 million as compared to HK$1,647 million recorded for the corresponding period of last year. This is also the reason behind the exceptional high sales recorded in October 2001 over the corresponding period of last year.
Wal-Mart continued to be the Company's largest customer in the US. With the Company's dedicated efforts and commitment to provide high quality products at affordable prices, couple with its market niche in the mass market, both played a major role in igniting recovery. Not to mention that the Company has successfully solicited new reputable clients, such as Siemssen & CO and Auchan, to name a few, the Company is poised to capture much business potentials as the market gradually recovers.
Commenting on the Company's interim results, Mr. Lam Man Chan, Chairman of Ngai Lik, said, "During the period under review, the Company has implemented several strategic measures as an effort to boost profitability and sustain gross margins. We have purchased 40 sets of new plastic injection machines to increase the overall production capacity and we have also launched multi-layer printed circuit boards to further achieve vertical integration efficiency. With our commitment to launch new products of good quality at competitive prices, coupled with our diligence to further vertically integrate the business, we are confident of capturing new and existing business opportunities to maximize profitability and to sustain promising performance for the future ahead."
On the other hand, as the Company witnessed a delay in the construction of its new motorcycle plant due to continuous rainfall and poor weather conditions, operation of the new plant with GFA of 20,000 square meters was postponed until first quarter of 2002 for its full utilization. As a result, the motorcycle division experienced a decrease in sales by HK$47 million, during the period under review.
However, the Company's motorcycle division was able to record an operating profit of HK$6,844,000 during the period under review despite the delay in the completion of the new plant. Moreover, the Company also focused on strengthening its advertising efforts to increase awareness of its brands and products. One such effort is through increasing the number of television advertisements in the PRC so as to introduce, reiterate and solidify its reputable brand to the enormous population of the PRC market to capture new potential customers.
Looking ahead, the Company will continue to implement various types of vertically integrated manufacturing processes for its EMS division, such as electroplating, coating and copper wirings that are essential parts to the EMS manufacturing operation. Secondly, the Company will maintain its effort to launch new products and to expand its product development capability as an effort to keep customers in proximately of the latest technologies development. Besides the new iDVD player and the advanced version of the digital camera with 1.3 million pixels that were launched during the period under review, the Company will launch new models of audio products and a series of home theater system which are already in the pipeline in the coming future.
As for the motorcycle division, the Company will develop marketing strategies to increase market penetration, to establish brand name awareness as well as to enhance product differentiation in the near future. The Company will prepare itself for the numerous potential opportunities arising from China's entry into the WTO and capture new customers. Moreover, the Company will also further vertically integrate its business so as to enhance operational efficiency and maintain cost control.
Mr. Lam concluded, "With our strong credit control, along with our proactive yet conservative cash management policies, the Company is able to enjoy a high liquidity and high cash surplus from operations. Our solid financial position will allow us to explore and seek future business expansion and investment plans, and hence, contribute to a handsome return for our supportive shareholders."
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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 motorcycle engines and trades motorcycle engine parts. It has been listed on the Stock Exchange of Hong Kong Limited since 1992.
For further information, please contact:
iPR Asia Limited
www.iprasia.com
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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