Mr Raymond Cheng Chor-kit, Chairman of Kin Yat Holdings, said: "The last six months had been a period of exceptional challenge to our Group in our history of operation. Demand and consumer sentiments declined to new troughs in the already weak global economy since the September 11 attacks. We have taken decisive yet appropriate measures to keep deployment of capital and other resources under tight control, but have been keeping a close scrutiny for opportunities in new products and business areas."

Turnover for Kin Yat's toys division declined 12% to HK$307,124,000, albeit on a high level of orders on hand. In the first half, retailers became increasingly conservative and postponed release of orders to manufacturers, shortening the lead-time available to the Group. Retailers' shift in merchandising effort on mid-priced items also exerted price reduction pressure on manufacturers. The lockup of the West Coast ports in the US in September had led to postponement and cancellation of certain orders, resulting in additional airfreight expenses to meet the severely squeezed delivery schedules.

"Not withstanding these stresses met this year, the Group remained in reasonably good shape due to sustained efforts taken in the previous years in production, financial and logistics management optimization. The volume of orders postponed as a result of the strike of dockworkers and shrinking consumer confidence had been significant, supporting our optimism for the toys division in the second half," added Mr Cheng.

Dragged by the subdued performance in the toys market, the motors division achieved a marginal 7% growth in turnover year to year to HK$125,612,000. The Group expects the motors division to continue to grow in modest pace. Its edge in manufacturing high quality products at competitive prices had correctly addressed manufacturers' cost concerns.

The motors division's diversification into the personal care product segment, despite still in an early stage of development, has proven to be a strategically correct move to harness future growth. The Group will continue to explore new opportunities in new market segments of motor-powered devices, and to invest in expansion of production capacity.

The Group's 50%-owned CDR production arm, Concord, had successfully relocated its facilities to the mainland, with six production lines under commercial operation since- August 2002. Concord had recorded a loss from its insufficient scale and cost inefficiency in Hong Kong before the relocation, as well as one-off relocation expenses. The Group expects Concord to contribute to overall bottom line profit by the year 2003/04.

Mr Cheng concluded: "Although a near-term recovery in global economy is yet to be in sight, worldwide consumption for toy and other motor-powered products can be maintained at present levels, with possible room to advance modestly. Our previous management optimization efforts made us better prepared to maintain longer-term sustainable growth. It is also a great honour to announce that our management efforts and long range commitment to the industry have earned us a place in 'The World's Best 200 Small Companies' poll of 2002 by Forbes Global."

About Kin Yat Holdings
Kin Yat Holdings Limited (SEHK: 638) is an industrial group with a niche in electronic and mechanical productions. It has a stretch of toy, micro motor and CDR manufacturing businesses, all based on its strong cost-effective engineering and production platform in China. Headquartered in Hong Kong, Kin Yat operates two production centers in Shenzhen and Shaoguan, China.

Six months ended September 30,
	2002	2001
	HK$ '000	HK$ '000
Turnover	444,916	487,835
Toys and related products	307,124	347,787
Motors (including sales to Kin Yat Group)	125,612	116,971
Motors (sales to Kin Yat Group)	(9,801)	(3,197)
Electrical household appliances	21,981	26,274
Net Profit Attributable to Shareholders	44,539	63,655
Segment Results from operating activities
Toys and related products	25,148	52,461
Motors (including sales to Kin Yat Group)	30,715	27,841
Electrical household appliances	472	796
Interim dividend per share	HK2.5 cents	HK3 cents
Earnings per Share
- Basic	HK11.34 cents	HK16.79 cents
- Diluted	HK11.30 cents	HK16.34 cents

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Kin Yat Holdings Limited

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