Ms Wong Choi Kam, Chairman, Sunway International said, "Global economic downturn was in its worst in 2001 and this presented a very difficult operating environment to business enterprises. Our investments in brand development, new product launches and production facilities, as well as the pursuit of an aggressive pricing strategy to tackle the business downturn, had adversely affected our income in 2001. However, this organisation evolution is critical in fully equipping us to maximise our future potential, and we are confident that the benefits of these capital investments that underpin our strategic business re-positioning will soon be reflected in our performance."

The decrease in pretax profits was also resulted from precautionary provisions of HK$12.6 million for bad and doubtful debts, HK$20.9 million for inventories and a revaluation deficit of HK$7.4 million from the Group's fixed assets in Hong Kong and the PRC.

Last year the electronic calculators operation contributed a revenue of HK$346.6 million, or 52% of the Group's turnover. The traditional calculators market was mired in cut-throat price competition last year. The Group pursued an aggressive pricing strategy in order to maintain its leadership position, commanding the largest share of the Mainland market. As part of its initiative to upgrade the overall product profile and to shift from an ODM-based to a brand-driven business, the Group introduced a new brand name, Kenko in February 2001, primarily for products targeting markets in North and South America. Kenko is the Group's third brand name after Sunway and Gavao.

Leveraging on the Group's strong R&D resources, mould making and production capabilities, a new line of personal data assistants (PDA) were launched for the China market in the year under review. To overcome the fiercely competitive business PDA market, the Group plans to re-position its product mix in 2002. A new line of competitively priced electronic dictionary targeting students is currently under intensive development.

The Group has also earmarked investments in expanding the production capacity for liquid crystal display (LCD) panels and quartz crystals, the two essential components for electronic consumer products. Already in the pipeline is the addition of one production line for the launch of 14" x 16" LCD screen in 2002. This new production line will jumpstart the Group's LCD production capability into becoming the largest in China. Another line is planned to commence operation by the second half of 2002 for high-frequency quartz crystal.

During the year, Sunway has paid up the remaining investment contribution in Angstrem Joint Stock Company for the acquisition of approximately 5% interest in the company. Angstrem is a leading producer of integrated circuits (IC) in Russia. The Group's investment in Angstrem is both a long-term investment and a means to secure a stable supply of ICs for its production. It will also seek to cement their partnership relationship through joint investments or collaborations. The two companies have undertaken preliminary discussions to explore the possibility of establishing new IC facilities in China.

The Group is actively pursuing to increase its presence in Northwestern China where it has already established a sales network in Xian, Chengdu and other major cities. The Group's market share in electronic calculators and other quartz products in this part of China now exceeds 30%.

"With a healthy financial position, we anticipate positive returns from our capital investments in product portfolio refinement, capacity expansion and intensive market-driven pursuits. We are confident of our resilience in tough market conditions and our ability to reap and rebound remarkably from the very first sign of economic recovery," concluded Ms Wong.

Sunway International Holdings Limited (HKSE: 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 (LCD) and electronic watch movements. The Group has also participated in the thriving telecoms equipment manufacturing business through its 40% interest in a joint venture with Taiwan Telecommunication Investment Co. Ltd.

Issued by :
Sunway International Holdings Limited

Through :
Troika Communications Limited
Jenny Lee / Angus Ho
tel: 2511 8388 / fax: 2511 8238
URL : http://www.t6pr.com
email: enquiry-at-t6pr.com (use "@" to replace "-at-")