Sunway remains to be one of the largest manufacturers of quartz crystals and liquid crystal displays ("LCD") in China. Sales of electronic calculators and LCD rose 3.0% and 14.3% respectively. This achievement is due to the Group's expanded LCD production capacity, growing applications and demand for LCD, and also the aggressive efforts by the marketing team. These two business categories contributed 65.4% and 7.5% respectively of the Group's revenues.

Ms Wong King Ching, Helen, Chairman of Sunway, remarked: "We are pleased to report an increase in overall sales volume in such a difficult time. This was largely attributable to our Group's operating and management efficiency derived from production scale. As one of the largest manufacturers of consumer electronic products and components in Asia, Sunway is a lot more resilient to adverse situations than its peers, thanks to years of dedicated efforts in consolidating the fundamentals."

In the consumer electronic segment the year 2002/03 saw the launch of newly developed products such as corded telephones with touch panel design and functions under the brand name "S.L.T.", touch screen data bank, EL watches, and products of integrated multiple functionalities, including English-Chinese dictionary, organizer, calculator and calendar. The Group has already obtained all necessary quality accreditations for the new corded phone production line to facilitate export sales rollout. Development efforts to expand the product line-up of waterproof watches with innovative designs are also actively in progress. The new watch series has recently been introduced to the market with excellent responses. The new corded phone and watch products will be the Group's growth drivers in the coming year.

In the components segment, Sunway added a new STN-LCD line for the manufacturing of larger 14" x 16" LCD panels that allow more flexible applications on higher-ended products with more favourable profit margins, including electronic dictionaries and caller identity display panels. In view of strong order books that go as far as April 2004, Sunway has decided to add two more STN-LCD lines within the coming financial year. Initial trial run is scheduled in May 2004. The new additional lines are designed to produce LCD of higher precision for application on more sophisticated products.

Efforts to optimize the economy of scale from the production of quartz crystals continued, and the management believes that the monthly capacity target of over 100 million pieces is within reach in the first half of the coming financial year despite the setback brought on by SARS.

Over the years, Sunway has expanded its production base in Putian, Fujian Province, into one of the largest manufacturing facilities for consumer electronics and components in Asia. The Group will consider to further expanding its facilities to sustain and support future growth. In particular, the Group will take into account the possible acquisition of a 230-acre site in Putian High Technology Industrial Zone that is in the vicinity of existing premises. The Group is also cautiously considering a strategic diversification of its production base with the establishment of additional facilities in Yiwu, Zhejiang Province, to take advantage of a more favourable and cost efficient labour supply in the area.

"Our facilities were already operating in full capacity in the 2002/03 financial year. As our strong order books indicate continued robust demand in the coming year, we believe that a further investment in expanding our manufacturing capabilities to keep pace with demand growth is critical to sustaining our leadership advantage. We believe that Sunway will soon return to the fast track of growth and are confident about achieving double-digit revenue growth in the coming year," explained Ms Wong.

New product research and development capability will also be further bolstered, as this is a recognized lifeline in the consumer electronics industry. As a leading China-based manufacturer, Sunway fully acknowledges the critical importance of product designs and functionalities in advancing sales and profit, commanding more favourable profit margins, and also maintaining its industry leadership.

During the year, finance costs went down significantly by 63.2% to HK$6,368,000 as the Group had fully redeemed the convertible bonds in 2002. Gross account receivables also dropped 15.0% due to tightened credit control during the SARS period. As at September 30, 2003, cash and bank balances was HK$131,048,000.

Ms Wong said: "Sunway will continue to focus on powering business growth through product innovation, market diversification, enhanced operating efficiency, disciplined manufacturing management, and further expansion in production capacity. Having experienced a difficult year, we believe that Sunway has come out stronger and better equipped to drive business growth and attain another level of corporate development in an economic and market recovery."

About Sunway International Holdings
China-based manufacturer of consumer electronic products and components with a wide stretch of businesses from calculators, quartz crystals, liquid crystal displays (LCD), integrated circuits to electronic watch movements. It is one of the region¡¦s largest manufacturers of calculators, quartz crystals and LCD. It participates in the thriving telecoms equipment manufacturing sector through a 40% interest in a joint venture with Taiwan Telecommunication Investment Co. Ltd. The Group¡¦s manufacturing facilities are based in Fujian, China with a workforce of over 17,000.

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