Overall gross profit margin declined marginally by 3%, mainly due to the significant increase in sales of LCD monitors, amounting to HK$1.7 billion as compared to HK$230 million of last year. The lower profit margin for LCD monitors was due to the shortage of LCD panels, which drove up material costs for LCD monitors during the year under review. The core operation remained profitable, with a profit before major provisions and write-offs of HK$27.5 million.

Although the Group has achieved improvements in operational efficiency as evidenced by year-on-year decreases in distribution and selling costs by 10.5%, administrative expenses by 12.5% and finance costs by 20%, the Group recorded a net loss attributable to shareholders of HK$77.5 million. The net loss was mainly a result of a one-off impairment in the Group's long term investment in a Taiwan listed equity totaling HK$65.1 million, and an exchange loss of HK$26.9 million incurred mainly by a Brazilian subsidiary due to the devaluation of the Brazilian Real. In addition, as management has adopted a very conservative accounting approach, provisions for bad and doubtful debts and for inventory obsolescence of HK$17.5 million and HK$13 million were made respectively.

Mr Rowell Yang Long-san, Chairman and Managing Director of PROVIEW International said: "During the financial year under review, we continued to fully leverage our world-class manufacturing capabilities, global distribution network, more competitive product cost structure, and the strong support provided by several strategic partners and, as a result, has every confidence in the performance for the year to come."

The Group's upward trend in sales continued well into the first quarter of fiscal 2002/03. In the first three months ended September 30, 2002, sales revenue of the Group increased by over 60% year on year.

Being a top-five monitors distributors in the world, PROVIEW maintains excellent relationships with leading components suppliers including Samsung SDI and AU Optronics. In order to secure a larger market share and to tap the Group's strong global distribution network, these suppliers have formed strategic alliances with PROVIEW. They have also reaffirmed their support to the Group by offering favourable open credit terms. In the future the Group will be able to expand its business volume without the need for additional bank facilities.

Mr Yang added: "This is an extremely positive signal for the Group pointing to strengthened supplier relationship and a more dynamic drive to grow our business in a much faster pace."

Overall market demand for CRT monitors is anticipated to decrease gradually, but as a result of the progressive market consolidation over previous years, there remain only a few major CRT computer monitor manufacturers in the market. Benefiting from the Group's strong global sales and distribution networks as well as from its recognized brand names "PROVIEW" and 'EMC', the Group believes that its market share will continue to grow rapidly over the next few years and will provide significant cash flow for the Group.

The LCD monitor market is still growing rapidly. For the year under review, the Group's sales of LCD monitors have increased dramatically, by almost 7.5 times to HK$1.7 billion million, and its share of the LCD monitor market has continued to grow very rapidly. As one of the world's major LCD monitor manufacturers, the Group has continued to invest aggressively in research and development in order to produce innovative new models with added features for the market.

The Group has successfully launched the world's thinnest LCD monitor and the market has responded very positively to this and to our other new models. Mr Yang continued: "We believe that the consolidation in the LCD monitor sector will accelerate and that the winners will be those monitor manufacturers who have strong and far-reaching global distribution networks and who can add more value in manufacturing through vertical integration, as is the case with our Group."

As a result of sustained efforts to integrate Group operations vertically, PROVIEW International is now a major manufacturer of deflection yokes, a critical component in CRT monitors. This enables the Group to maintain its profit margin in the very competitive monitor market. Currently, the Group produces approximately 300,000 deflection yoke units each month, and targets to increase monthly capacity to 550,000 pieces by the end of 2002.

As regards the production of LCD monitors, the price of the Liquid Crystal Module (LCM) accounts for about 85% of the total cost of an LCD monitor. A year ago, the Group decided to acquire technological know-how related to LCM production, followed by the installation of essential facilities. As a result, the Group is now able to perform both semi-knock-down LCM and Backlight module assembly. With higher degree of vertical integration, the Group's competitiveness in the LCD monitor market will be enhanced significantly.

The Group has received orders from new customers subsequent to the year-end. Among these highly reputable customers are HPQ, Acer, A-open, Carrefour, and Wal-mart. Sales volume of both CRT and LCD monitors has also improved steadily over the last few months. The Group believes that it is now entering into a new phase of high growth which will continue over the years to come.

Total capital expenditure over the next year is estimated to be HK$37 million. For the current year, expenditure on research and development remained steady at HK$22.1 million. The Group holds the belief that its competence can only be enhanced through R&D and innovation.

As of June 30, 2002, cash and bank balances were approximately HK$273.7 million with total Group shareholders' equity standing at HK$581.1 million.

Financial Highlights

	Year ended June 30,
	2002	2001
	HK$ '000	HK$ '000
Turnover	4,633,000	3,700,566
Profit/(loss) from operations	(7,965)	72,300
Net profit/(loss) attributable to shareholders	(77,504)	2,637
Basic earning/(loss) per share	HK(12.20) cents	HK0.41 cents

About PROVIEW International
PROVIEW International Holdings Limited is a world top-five computer monitor producer with house brands of "PROVIEW" and "EMC". With years of dedicated efforts to develop direct sales channels in North America, Europe and Asia, the Group now commands a global retail-sales network on a strong manufacturing platform supported by world-class facilities located mainly in China.

Issued by :
PROVIEW International Holdings Limited

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