Ngai Lik Industrial Holdings Limited - Announced 2003 Annual Results

(July 8, 2003 - Hong Kong) - Ngai Lik Industrial Holdings Limited ("Ngai Lik" or "the Group"; stock code: 332), a leading player in the electronics manufacturing services industry, announced its annual results for the year ended March 31, 2003.

For the year ended March 31, 2003, the Group recorded a turnover of HK$3,074,197,000 representing an 8% increase as compared to the corresponding period last year. Impressive profit growth was recorded with profit attributable to shareholders amounting to HK$230,018,000, a rise of 4.5% from HK$220,188,000 in year 2002. The Electronics Manufacturing Services ('EMS') division accounted for approximately 93.2% of the Group's total turnover and achieved a revenue of HK$224,955,000.

The Board of Directors recommended the payment of a final dividend of 8 HK cents per share together with the interim dividend of 6 HK cents per share, this brings the total dividends for the year to 14 HK cents, an increase of 7.7% over last year.

Commenting on the Group's performance, Mr. Lam Man Chan, Chairman of Ngai Lik, said, 'Despite the sluggish economic environment that has been adversely affected by the second US-Iraq War and the SARS outbreak worldwide, the Group still attained solid growth in sales turnover. The steady performance in turnover reflects the consistent demand for low cost electronics products in the mass market segment. Thanks to our scalability and vertical integration strategies, we have consistently been able to achieve profits through improved efficiency, tighter cost control and strong economies of scale. Our gross profit also maintained at a steady level of 11.8%.'

During the year, the Group continued to diversify its vertically-integrated production bases and the new component manufacturing operations included electroplating, production of springs and flexible circuit boards. Certain advanced SMT and CNC moulding-machines were also added.

The American market was still the major contributor for the Group, accounting for 59.4% of the total turnover. Simultaneously, European sales continued to grow satisfactorily, accounting for 21.8% of the total turnover, up 3.4% from last year. Meanwhile, the Group has been taking proactive steps in expanding its market reach. During the year, the Group successfully solicited a numbers of new customers, including a German leading retailer, a major international importer and a leading local electronics conglomerate.

Ngai Lik also broadened its product line during the year under review. The Group successfully expanded its business in digital related products, including MP3 discmans and DVD players. Certain high-value digital products, including DVD combos and home theater systems were launched to the market in June 2003 and the market response has been very positive. It has also been the Group's strategy to move towards higher-margin products and increase its market share on a steady basis while maintaining its leading position in the mass market of home audio products.

The motorcycle division faced a challenging year and the market conditions were further aggravated by the recent outbreak of SARS in China. During the year, the Group has implemented various cost reduction measures and a gross profit of HK$10 million was recorded, representing a 48% decrease compared to last year. The floor area occupied by the motorcycle plants has been reviewed and about two third of their total usable floor area has been either shifted to other investment opportunities or reallocated to the production operations of the EMS division.

Mr. Lam is confident the Group will continue its success in the coming year. He said, 'Based on the encouraging consumer demand in the American and European markets, orders for consumer electronics and home entertainment products will continue to be a material profit contributor for the Group. With the gradual completion of the new Industrial Estate in Qingyuan, the Group is expecting to see greater synergies and benefits from economies of scale. The first phase of Qingyuan Industrial Estate will be put into use during the third quarter of 2003 and production capacity is expected to increase significantly.'

'Looking ahead, the Group will continue to embrace its commitment to the provision of quality goods at affordable prices to our customers and the continuous development of new products to maintain our competitive position in the market. New digital products including LCD TV with DVD players and DVD recorders will be introduced into the market. We are confident that our relentless efforts in extending our product range and developing new product with higher profit margins will ultimately bring tremendous returns for our clients, our shareholders and the Group for the years to come' concluded Mr. Lam.

-End-

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
Callis Lau/ Fung Hon/ Antonia Au
Tel : 2136 6952/ 2136 6956/ 2136 6176
Fax : 2136 6068/ 2136 6118
E-mail : info@iprasia.com.hk
Website : www.iprasia.com