(Hong Kong, December 15, 1999) - Leading audio-visual ODM and OEM manufacturer Tonic Industries Holdings Limited ("Tonic") (Stock Code: 978) today announced its interim results for the six months ended 30 September 1999. Tonic attained a consolidated turnover of HK$ 1,080 million, an increase of 12% over the corresponding period in 1998. Net profit attributable to shareholders surged by 20% to HK$ 34.4 million.
Basic earnings per share were HK 6.1 cents. The Board of Directors recommended an interim dividend of HK 1.5 cents per share for the six months ended September 30, 1999.
Mr. Simon Ling, Chairman of Tonic said, "We are pleased to see the satisfactory growth in the Group's interim results. All our plans for different products are progressing smoothly, especially our MD Hi-Fi systems, more than 150,000 sets have been sold during the period. Foreseeing that the demand for MD products will remain strong, we will continue to maximize our expertise in the manufacturing of MDs by further enhancing our production techniques to produce different MD models, such as the portable MD system and MD player".
Since Tonic signed a MD license agreement with Sony Corporation in 1999, entitling it to manufacture its own MD products, the Group has been working to develop its own MD products with advanced features. Currently, different MD models are being designed for its ODM customers. Commercial production for the Group's first portable MD player will commence in January, 2000. In addition to MD products, the Group has also successfully developed production technology for DVD players, which are expected to introduce in the market in the first quarter next year. The Group believes digital products would eventually replace all the analogue products in the market. Demand of DVD shown sign of increasing as well.
Mr Ling said "With the successful launch of the new products and increasing orders being received from customers, we have already consolidated all our existing operations in the period and successfully shifted our product mix to higher profit margin products. Looking ahead, we have acquired an additional piece of land next to our existing manufacturing plants in Dongguan and two new factories with a total production floor area of more than 450,000 square feet will be built on this space. We believe that after the completion of these two factories, we will have sufficient capacity to further expand the production of more higher profit margin products which will generate higher profit growth for the Group.
The first new factory block with a total area of approximately 250,000 square feet will be completed in May 2000, increasing the Group's production capacity by 25%. With the completion of the second new factory block, the Group's production capacity will increase by more than 45%.
Apart from the manufacturing of audio and visual products, the Group is also diversifying to develop and manufacture other high technology products. A new division, Tonic Technology Limited, has been formed to specialize in the development of high-tech products, such as Home AV Centers, a total control of audio, video and surveillance central console and digital satellite receivers. These products have been exhibited at the 1999 Hong Kong Electronics Fair, and were well received by the market. The AV console is already in production whereas the digital satellite receiver will be launched in the market in the second quarter next year.
The home appliance business is also progressing on-schedule, and will begin commercial production of its first innovative, three in one coffee machine in the first quarter of 2000.
Mr. Ling concluded, "We believe that the new product divisions will perfectly complement our existing AV business while providing a greater choice for our customers. Therefore, the Group is confident that with the encouraging results received and our upgraded product portfolio, we will be able to maintain our leading position in the industry and achieve even better results for the full year."
Tonic is principally engaged in the design, manufacture and marketing of a wide range of consumer AV products. These include MD systems, DVD players, CD portables, MP3 products, Dolby Prologic stereo receivers, portable CD/cassette/radio systems, portable cassette recorders, mini Hi-fi music centres and equalisers. Products are sold on an ODM and/or OEM basis to overseas importers and manufacturers with well-known brandnames such as Alba, Bush, Emerson, GPX, Kenwood, Medion, Pioneer, RCA, Sanyo and Thomson. The Company listed on the Hong Kong Stock Exchange in October 1997.
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This media release and the other corporate information of Tonic Group can also be accessed through the following website:
http://www.irasia.com/listco/hk/tonic
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