During the period, the Group implemented a series of business realignments and repositioning measures. The decline in sales and profits is attributable to a combination of factors including overall industry drop in market prices for traditional items such as calculators, deployment of resources to build up new facilities resulting in pre-operating expenses, and management's decision to scale down the manufacturing of traditional timepiece movements.

To retain its top position in electronic calculators, the Group decided to temporarily lower its profit margin to improve its competitiveness. This strategy has result in an expanded market share and turnover from HK$490,085,000 to HK$528,426,000, while at the same time some competition has been eliminated by the extremely harsh operating environment.

"Sunway Group was able to maintain a stable income stream in the year under review, in an extremely challenging and fiercely competitive market for local manufacturers of electronic products, telecommunications equipment and timepiece movements. With fewer players in the calculators market, and with the implementation of the repositioning measures, we are confident that the Group will register improvements in its performance for the next year," commented Ms Anna Wong Choi-kam, Chairman of Sunway International.

In addition to traditional calculators, the Group is gradually shift its focus to better profit-generating product such as PDA ("personal data assistant"). An initial lot of 20,000 PDAs will be produced in the coming year, for distribution through the Group's 21 agents on the Mainland. Management will closely monitor the market response to this line of product. It is anticipated that with booming demand for PDAs across China, it will develop a second-generation product with enhanced features including ultra red devices for wireless Internet access and much thinner design with the use of lithium batteries. Management is confident that this new product line will form another steady income source for the Group in future years.

The Group has increased its investment in Taiwan Communication (Fujian) Co. Ltd. ("Taiwan Communication") to a total of HK$20 million. This joint venture is now turning out about 20,000 fax machines monthly under the NEC brand name, and is working on getting new orders from other major brand names including Toshiba. Taiwan Communication is also developing a new telephone product line, such as visual phones and Internet phones, for introduction to the market in the coming year.

Sunway International Holdings Limited (SEHK : 58 / SES : SIHL) was listed on the main boards of the Stock Exchange of Hong Kong and the Stock Exchange of Singapore in September 1999. The Group develops, manufactures and sells consumer electronic products and electronic components such as quartz crystals, liquid crystal displays (LCDs), printed circuit boards (PCBs) and watch movements. The Group has also participated in the thriving telecom equipment manufacturing business through its 40% interest in a joint venture with Taiwan Telecommunication Investment Co. Ltd.

Issued by :
Sunway International Holdings Limited

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