Mr Rowell Yang Long-san, Chairman and Managing Director, PROVIEW International remarked: "PROVIEW shipped a total of 7.2 million monitors in calendar year 2003, positioning us as the world's 5th largest CRT and 7th largest LCD monitor producer. In the first half, we continued to power our profitable growth through capacity increase, sales network expansion, further vertical integration and sustained R&D. We anticipate even more exciting prospects ahead as we roll out our business plan jointly with Motorola to lead our first foray into the arena of consumer electronics."

Having established a strong foothold in the display industry, the Group is extending its manufacturing capability into the production of consumer electronics products. In October 2003, the Group announced the formation of a strategic alliance with Motorola to jointly develop an array of flat-panel displays and IT, wireless and next-generation products. The first series of MotorolaTM-brand products are scheduled for launch in China by April 2004.

Despite constraints in the supply of LCD panels in the 15-inch and to a lesser extent the 17-inch panel category, the Group shipped 1 million LCD-monitor units in the first half, as compared with 0.7 million units of the previous period. According to an MIC market report, CRT monitors will continue to be replaced by LCD monitors, and annual shipments of CRT monitors will shrink from around 70 million units in 2003 to around 44 million units in 2006. Against this background, the Group has increased its share of this market, shipping some 2.8 million CRT monitors during this six-month period, compared with 2.2 million units in the previous period. In the first half, CRT and LCD monitors contributed 43.7% and 53.7% of the Group's revenue respectively.

The Group's three core markets, Asia, Europe and America, all experienced a surge in demand, albeit to different degrees. Sales to America, Europe and Asia represented 32%, 35% and 31% of the Group's net turnover respectively.

Gross profit margin from the Group's CRT monitor operations declined mildly from 11.6% to 9.4% as it offered more competitive prices to customers in order to increase market share. In the LCD monitor segment where fierce competition and shortage in panels prevailed, PROVIEW succeeded in raising its gross profit margin from 6.7% to the current 8.4% with enhanced industrial design and in-house assembly of LCD panels. The improvement in the overall net margin was mainly attributable to higher economies of scale derived from strong sales and the Group's continued cost-containment policies.

In the first half, expenditure on research and development was boosted from HK$18.6 million of the previous period to HK$36.8 million or 0.9% of turnover. Mr Yang added: "Our Group's long-term business development is driven by market, technology and manufacturing. To secure our ongoing growth and profitability, we have strengthened our research team to meet the requirements of the new digital era. We plan to launch a completely updated range of display products ranging from CRT and LCD monitors to innovative consumer electronics products such as LCD TVs, Plasma TVs and portable DVD players."

To consolidate its competitive position, the Group has continued its vertical integration of in-house production of critical components including CRT monitor deflection yokes and LCD monitor panel assemblies. Over the next few months, the Group will double its monthly production capacity of deflection yokes from 0.5 million units to 1 million units. It has also acquired the manufacturing technology for small to medium-size LCD panels, which can be used in consumer electronics products.

As of December 31, 2003, the Group had cash and bank balances of approximately HK$928 million. Total borrowings from banks and financial institutions were HK$1,849 million, majority of which were trade-finance related and short term in nature. Financial gearing, representing the ratio of total borrowings from banks and financial institutions to total assets, was 42.1%. The Group believes that its future cash-flow requirements can be satisfied by funds generated from operations and facilities provided by banks and financial institutions, and by the strong support of its strategic partners.

Financial Highlights

	Six months ended December 31,
	2003	2002
	HK$ '000	HK$ '000
Turnover	4,328,363	3,355,770
Profit from operations	166,212	103,689
Net profit attributable to shareholders	109,992	73,276
Basic earnings per share	HK17.16 cents	HK11.53 cents
Interim dividend per share	HK2.8 cents	HK1.7 cents

About PROVIEW International
PROVIEW International Holdings Limited (SEHK: 334) is a world top-five display devices producer owning globally recognized house brands including PROVIEW and EMC. The Group commands a global retail-sales and distribution network covering 50 countries with strong leverage of its world-class manufacturing facilities in China, Taiwan and Brazil. It has an annual production capacity of 14 million units of CRT monitors and 6 million LCD monitors. In October 2003, PROVIEW established a strategic alliance with Motorola, Inc. (NYSE: MOT) to connect the home with a new line of display solutions. For more information, please visit www.proview.com.

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PROVIEW International Holdings Limited

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