PRESS RELEASE
For Immediate Release
For further information, please contact:
| Mr. Ricky Ma | |
| Tomorrow International Holdings Limited | Tel: (852) 2330 1550 |
| Ms. Tak Yin Chan / Ms. Erica Yiu | |
| Dewe Rogerson China | Tel: (852) 2528 8900 |
The following release can also be seen at
http://www.irasia.com/listco/hk/tomorrow
(Hong Kong, 10 May, 1998) The Board of Directors of Tomorrow International Holdings Limited (the "Group") (HKSE: 760; NASDAQ: TIHDY US) today is pleased to announce its 1997 annual results for the financial period from 1 November, 1996 to 31 December, 1997.
The Group's total turnover was HK$ 557.1 million (US$ 71.9 million) for the fourteen months ended 31 December, 1997, representing a decrease of 3.7% over 1996. Profit attributable to shareholders after taxation and minority interests amounted to HK$ 11.0 million (US$ 1.4 million), a decrease of 84.7% over 1996.
Earnings per share for the financial period were 2.5 HK cents compared with 17.8 HK cents in the previous year. The Directors do not recommend payment of a dividend for the period.
Business Review
Pursuant to the Group's earlier restructuring, the Group has been operating efficiently with two main business streams, namely Electronic Products Division (for the manufacture and sale of electronic products) and Electronic Components and Parts Division (for the manufacture and sale of printed circuit boards ("PCBs") and the trading and distribution of electronic components and parts).
In the period under review, the Electronic Products Division contributed 54.0% of the Group's turnover whereas the Electronic components and Parts Division took up the remaining 46.0% compared with 53.7% and 46.3% respectively for the last year.
Under the restructuring, the Group was able to leverage its strengths and capabilities in the area of manufacture and sale of PCBs. Whilst the unfavourable market conditions dampened the performance of the trading and distribution of electronic components and parts, the tightened sales and credit policy strictly adopted by the Group for its distribution business had mitigated payment problems from the customers.
Electronic Products Division
During the fourteen months ended 31 December, 1997, the Group recorded a slight decrease of 3.3% in turnover for Electronic Products Division. OEM business continued to grow at a healthy rate but the unfavourable market conditions in Asian countries brought a decrease in orders from ODM business. After the factory expansion program, the Group will aim at strengthening and solidifying the existing production capacity and will take various cost and management control measures to gear up its efficiency.
Electronic Components and Parts Division
Manufacture of PCBs maintained a continuous and satisfactory growth in turnover with an increase of 60.4% over last year as buoyed by increasing demand in the high value high technology industries.
The depressed market environment in Hong Kong adversely affected the Group's trading and distribution business of electronic components and parts. The absorption of capital expenditure on the establishment of the PRC offices from the second half of 1996 onwards further affected the business. In response to the unfavourable market condition, the Group has tightened its sales and credit policies and inventory control.
In the Electronic Components and Parts Division, PCBs constituted a major growth area and was the focus of intensive expansion efforts. The three-year expansion programme of PCBs has helped to upgrade the first production line and the expansion of the second production line has also been completed and fully operated in April 1998. In mid-1998, when both lines will be fully operational, the production capacity for PCB products will be ramped up by 150% provoking a shift to higher margin and higher layer count products.
To drive this expansion programme, the Group had undergone a review and restructure of its management, operations and controls at the Dongguan factory and Hong Kong sales office. As a result, the Group was awarded a certificate of ISO 9002 in September 1997.
Future Prospects
For the Electronic Products Division, various projects of research and development on different products have been launched, including weather forecast equipment, digital compass, radio control clock and radio frequency products etc.
On the manufacture of PCBs, the Group intends to set up a third production line in early 1999 to further boost the production capacity. An additional HK$100 million has already been earmarked for this expansion.
Looking ahead, Mr. Paul Yau, Chairman of the Group, is confident of the Group's prospects, "Demand for electronic products, PCBs, electronic components and parts will increase steadily along with the rapid development of electronic industry in the PRC as well as the flourishing global computer industry." Mr Yau added, "The Group has been diversifying its business scope to include other electronic products, being an integral part of our long term strategic corporate development plans. We will continue to tap any market opportunities that arise to strengthen the Group's business. With the R&D expertise, strong manufacturing capacity and comprehensive distribution network as well as aggressive expansion efforts, we strongly believe that we can obtain promising results in the years ahead."
The Group is a diversified electronic enterprise, concentrating mainly on manufacturing and distribution. The Group manufactures and sells digital thermometers, digital timers, electronic clocks, car accessories and PCBs, as well as distributes electronic components and parts. It is an authorised distributor of Seiko-Epson's electronic components and parts in Hong Kong and the PRC.
TOMORROW INTERNATIONAL HOLDINGS LTD
1997 ANNUAL RESULTS SUMMARY