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KIN YAT HOLDINGS LIMITED
Even distribution of toys orders throughout 2006/07
led to HK$472 million in 1H turnover
Confident of ongoing performance on the back of new orders in place
Hong Kong, December 18, 2006 - Leading toys, motors and electrical appliances manufacturer Kin Yat Holdings Limited (HKEx: 638) today announces the interim results for the six months to September 30, 2006. As a result of the more evenly distribution of toys orders throughout the current fiscal year, the reporting period recorded a 11% drop in turnover to approximately HK$471,928,000 (2005: HK$531,155,000), compared with an exceptionally robust order quantity same period last year, while profit attributable to equity holders of the Company was HK$33,536,000 (2005: HK$58,295,000). The Group declared an interim dividend of HK2 cents per share.
The core toys and motors divisions contributed 61% and 31% respectively in turnover to the Group during the period in review.
Mr Raymond Cheng Chor-kit, Chairman of Kin Yat Holdings, said: "We are optimistic as to the ongoing performance because of the new orders in place, greater vertical integration and other strategic cost cutting measures to produce better yields."
Market conditions for the toys division remained challenging and competitive. Unlike the first half of last year which was highlighted by an exceptional concentration of orders due to clients' schedule of launch of movie-related items, toys orders for the current fiscal year are more evenly distributed throughout. The division secured part of the orders in relation to two blockbuster movies and anticipates that the full year result to better reflect the performance of the division.
One of the Group's major toys customers has obtained a five-year license from a well-known U.S. entertainment company to develop products based on its globally renowned super hero universe. We are encouraged by this development and the positive impact it will bring to our toys division.
While new business opportunities are optimistic, the toys division continues to work hard to deal with adverse environmental factors. One main strategy is to step up the relocation of toys production from Shenzhen to Shaoguan where the production cost is significantly lower.
The motors division reported stable turnover growth and performance, despite a challenging market environment beleaguered by increases in copper and steel prices, and shortage in labor. The division has been successful in offsetting some of the negative impact through a strategic shift to focus more on products of higher margin.
The toys industry customers remain a significant income source but the motors division is encouraged by both confirmed and trial orders from new non-toys customers. The trial orders, when confirmed, will be an impetus to better results in the 2007/08 financial year.
The electrical appliances division is set to be one of the growth drivers in the coming financial years as we further diversify our electrical appliances products to artificial intelligent robots with the latest order from iRobot Corporation ("iRobot"). The division looks forward to co-operating further with iRobot to develop more high value-adding home electrical appliances.
"Based on orders in hand, we expect revenues from the toys division to demonstrate a rebound in the second half when compared with the same period in the last financial year, and believe in achieving a healthy growth full-year turnover year on year. For the mid term, we are also optimistic as to the prospects of the 2007/08 financial year as the toys, motors and iRobot development and the synergies from further vertical integration will be better reflected," added Mr Cheng.
The Group had cash in hand of HK$113 million and a healthy gearing ratio of 2.1% as at September 30, 2006. Commanding a strong financial position, the Group is well positioned to continue its active pursuit of new investment opportunities that are synergistic with its existing core businesses, with a view to delivering better returns for shareholders.
About Kin Yat Holdings Issued by : Through :
Kin Yat Holdings Limited (HKEx: 638) is an industrial group with a niche in electronic and mechanical productions. It has a stretch of toy, micro motor and electrical appliances manufacturing businesses, all based on its strong cost-effective engineering and production platform in Shenzhen and Shaoguan, China.
Six months ended September 30,
2006
2005
HK$ '000
HK$ '000
Turnover
471,928
531,155
Toys and related products285,755
366,473
Motors (including sales to Kin Yat Group)149,050
120,268
Motors (sales to Kin Yat Group)(3,441)
(3,663)
Electrical household appliances22,295
28,179
Material development18,269
19,898
Net Profit Attributable to Shareholders
33,536
58,295
Segment Results from operating activities
Toys and related products14,310
47,142
Motors (including sales to Kin Yat Group)31,035
28,209
Electrical household appliances(386)
874
Material development(599)
1,135
Interim dividend per share
HK2.0 cents
HK2.0 cents
Earnings per Share
- Basic
HK8.28 cents
HK14.40 cents
- Diluted
HK8.26 cents
HK14.37 cents
Kin Yat Holdings Limited
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