RESULTS

The Directors of Lung Kee (Bermuda) Holdings Limited (the "Company") have pleasure in submitting the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended 31st March, 1998 together with comparative figures for the year ended 31st March, 1997 as follows:

NOTES:

(1) EXCEPTIONAL ITEM

Last year exceptional item represented the gain and deemed gain on disposal of Lung Kee Metal Holdings Limited, the intermediate holding company of the Group's mould base manufacturing business.

(2) TAXATION

Hong Kong Profits Tax is calculated at 16.5% (1997: 16.5%) of the estimated assessable profit for the year.

There was no significant unprovided deferred taxation for the year or at the balance sheet date.

(3) DIVIDENDS

(4) EARNINGS PER SHARE

The calculation of earnings per share is based on the profit for the year of HK$103,478,810 (1997: 210,621,190) and on the weighted average of 377,523,185 shares (1997: 369,849,871 shares after adjusting for the Bonus Share Issue) in issue during the year.

The calculation of the adjusted earnings per share is based on the profit attributable to shareholders (but before exceptional items) of HK$103,478,810 (1997: HK$111,014,870) and on the weighted average of 377,523,185 shares (1997: 369,849,871 shares after adjusting for the Bonus Share Issue) in issue during the year.

Fully diluted earnings per share are not presented as the exercise of the Company's outstanding share options would not have a significant diluting effect on the basic earnings per share.

FINAL DIVIDEND

The Directors have resolved to recommend to shareholders at the forthcoming 1998 Annual General Meeting the payment of a final dividend of 10 cents per share for the year ended 31st March, 1998 to shareholders whose names appear on the Register of Members on 24th July, 1998. Subject to the approval by shareholders at the forthcoming 1998 Annual General Meeting, the proposed final dividend will be despatched to shareholders on or about 19th August, 1998.

BUSINESS REVIEW

During the financial year, the Asia financial turmoil occurred. This widespread crisis affected every company in Asia. However, the Group's business could still achieve a record turnover. This was mainly due to the Group's continuous expansion in its production capacity and improving its ability in manufacturing high quality and higher value-added products.

The Shanghai, People's Republic of China ("PRC") plant started production during this financial year. It now sells mould bases in the Eastern China region. Although there is currently no contribution from this plant, it is expected that it will contribute to the Group in the coming future.

Due to the Asia financial turmoil, the operations in Japan and Malaysia incurred losses. However, the operations in these countries are small and therefore the effect on the Group is not significant.

The turnover and profit of mould steel trading business continued to grow. There is some pressure on the pricing of the mould steel. However, the increased varieties of mould steel products will bring the steady contribution to the Group in future.

PROSPECTS

The Group's Guangzhou (PRC) plant started operation in this month. It is expected that it will contribute to the Group this year. It is for European Market.

In order to further increase the production efficiency and lower the cost of manufacturing, the Group is going to build a new plant in Heyuan (PRC) which will specialize in producing standard products. It is projected to be completed within two years.

The recent Asia financial turmoil definitely has a negative effect on the Asian economy. However, it is expected that it will start recovery next year. Due to the Group's conservative strategies adopted, it will overcome any difficulties arising from the turmoil. It is still expected that the Group can maintain its market leader position in the moulding industry and strengthen further in future.

YEAR 2000 COMPLIANCE

Since the Group developed most of its computer systems during 1990's, there is little chance of non-compliance for year 2000. However, the Group has set up a working group to study and solve the issue completely. It is expected that the issue will be solved by the end of 1998.

CLOSURE OF REGISTER OF MEMBERS

The Register of Members of the Company will be closed from 20th July, 1998, to 24th July, 1998, both days inclusive during which period no share transfers will be effected.

In order to qualify for the proposed final dividend, all share certificates accompanied by the completed transfer forms either overleaf or separate or Standard Transfer Form, must be lodged with the Hong Kong Branch Registrars of the Company, Central Registration Hong Kong Limited of 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong for registration not later than 4.00 p.m. on 17th July, 1998.

PURCHASE, SALE OR REDEMPTION OF SECURITIES

There was no purchase, sale or redemption of shares or other securities of the Company by the Company or any of its subsidiaries during the year.

By Order of the Board
Siu Tit Lung
Chairman

Hong Kong, 26th June, 1998

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