[For immediate release]
[14th December 1999, Hong Kong] - CEC International Holdings Limited ("CEC" or the "Group"; stock code: 759) announced its unaudited interim results for the year ended October 31, 1999 today. CEC International was listed on The Stock Exchange of Hong Kong Limited on 15th November 1999.
For the six months ended 31st October 1999, the Group's unaudited turnover and profit attributable to shareholders were approximately HK$133,282,000.00 and HK$23,878,000.00 respectively, representing an increase of 17.0% and 36.1% over the same period of the previous year accordingly.
The steady improvement in the Group's business performance has mainly been attributable to two reasons, namely, the economic recovery of the Asian economies after the regional financial turmoil as well as the widening of the Group's own customer base.
The gross profit margin and net profit margin for the same period under review were approximately 34.7% (1998: 30.7 %) and 17.9% (1998: 15.4%) respectively. According to Mr. Coils Lam Wai Chun, Chairman and Managing Director of the Group, "The increase in profit margins have mainly been attributed by the reduction of overall production cost, arising from further improvement in production technology and better utilization of the Group's facilities to produce its own coils components. In particular, ferrite cores, plastic, and metal parts. Saving to cost was also derived from economies of scale following the increase in turnover by approximately 17.0 % in the six months ended 31st October 1999 as compared with those in the corresponding period in 1998."
A Market Derived by Advanced Technology
In the light of a drastic increase in the demand for high technology and high-precision electronic products, the Group is planning to expand its automated production facilities in Singapore for the production of a variety of chip inductors. The facilities are scheduled to be operational from the first quarter of 2000 with an estimated investment of approximately HK$10,000,000. The manufacture of miniaturized surface mount type electronic parts with high quality electrical property, reliability and stability can help meet market demand derived from the latest trend in technological advancement. The direction of these developments is very much in line with the market trend towards product miniaturization and design precision.
Expansion of Production
The Group will continue to explore more markets and expand its product range by diversification, such as making line filters and switching power transformers, which are extensively used in the making of computers, telecommunication equipment and household electrical appliances. In addition, the Group will continue to implement its strategy of vertical integration to develop ferrite cores-manganese zinc series, a highly cost effective material for production. The Group is hoping to raise its profitability by reaping the fruit of its efforts spent over the past eight years in developing production technology as well as a concoction formula during the manufacture of ferrite cores. The Group has planned to acquire a piece of land of approximately 18 acres, with an estimated cost of approximately HK$3,000,000 in the vicinity of the Zhongshan facilities for the construction of new manufacturing facilities.
The Group is gradually moving away from the traditional mode of coil production and increasingly adopting automated production, as part of our plan to downsize the required labour and shorten the necessary production time. The Group's production facility for radio frequency coils and intermediate frequency coils are scheduled to be operational by the end of December 1999. The estimated investment is approximately HK$9,000,000. The Group has also planned to invest into an automated production facility for toroidal coils and choke coils, scheduled to be operational by mid 2000. The estimated investment is approximately HK$7,000,000. Additional automated production facilities for the production of high quality radial type choke coils, will be operational by mid 2000, in order to cater for the demand of the Group's customers who make electrical appliances and audio-visual equipment. The estimated investment is approximately HK$9,000,000. The production automation will substantially improve upon management control and the Group's production efficiency.
The Group has completed internal networking with the installation of personal e-mail for individual staff. In addition, the Group is developing an e-commerce portal for an on-line sales and support system. More resources will be directed towards the development of a better management information system for the Group.
With the success of the Sino-US negotiations regarding China's accession into the World Trade Organisation ("WTO"), Mr. Lam also commented, "The demand for telecommunication products and household electrical appliances in the PRC is expected to rise. Accordingly, the demand for coils in the global market is also expected to increase, which proves that the Group's business strategies are in the right direction. We are looking forward to a bright future with proactive optimism."
The Group is looking forward to continue its strive following the principles of prudent financial and investment management, in order to yield optimum benefits from any business opportunities due to emerge.
Mr. Lam concluded, "CEC's previous success has been based upon its persistence in improvement, devotion and perfection within the industry. The Group will, in the coming years, continue to expand its operations aggressively so as to uphold these principles and position itself for a higher profile in the global coil market, and ultimately fulfil our mission to become the largest vertically integrated coils manufacturer in the world."
CEC is a reputable coil manufacturer, engaged in the design, development, manufacture and sales of a wide range of coils. CEC coils can be commonly found in IT products, telecommunication products, home appliances and audio-visual products, etc. Accredited by the recognition of ISO 9001 in 1995, the Company has more than 400 engineers and quality control staff for the assurance of product quality. CEC has been a listed company on The Stock Exchange of Hong Kong Limited since November 1999.
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