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KIN YAT HOLDINGS LIMITED
Achieves record turnover of HK$921 million in year to March 2007
The core toys, motors and electrical appliances divisions contributed 67%, 25% and 5% respectively in turnover to the Group during the year.
The toys division recorded a 26% increase in turnover to HK$616,809,000 but high material prices and increasing minimum wages have eroded segmental profit margin. The division has received repeat orders for Star Wars products as well as new orders for Spider-Man 3 and Transformer toys. Confirmed orders received for Transformer toys exceeded expectation with orders on hand up to September 2007. The Group is confident of securing more orders for production up to the last quarter of 2007 and even the first quarter of 2008. Confirmed orders have also been received for Hulk products which will enter the production line in the second half of the 2007/08 financial year. In addition, new Spider-man and Star Wars products are actively under development.
Meanwhile, a major customer has obtained a five-year license from a well-known US entertainment group to develop product series on its globally renowned super hero universe characters. With a repertoire of over 5,000 characters, it is one of the world's most prominent character-based entertainment companies. The Group expects continued orders from this exciting product initiative.
Kin Yat Chairman Mr Raymond Cheng Chor-kit said: "These confirmed orders and exciting prospects have placed us on solid platform for turnover performance. However, whether these orders will transform into higher profitability is hinged on our capability to raise productivity and improve cost effectiveness. As our new industrial plants in Shaoguan has commenced production, we will continue to relocate more production facilities from Shenzhen to the lower-cost Shaoguan. Streamlining production process is also an ongoing cost control and productivity enhancement initiative."
The motors division also reported satisfactory growth in segment turnover and profit despite a challenging environment. Rising copper and steel prices and minimum wage rates were mitigated with a successful shift to higher-margin products. The division contributed external sales of HK$226,747,000, up 26%, partly attributable to orders placed by new non-toys customers upon satisfactory completion of trials.
Tremendous growth is expected in the electrical appliances division which cooperates with iRobot Corporation ("iRobot") to manufacture artificial intelligent vacuuming robots. These products have entered production lines and are on schedule for planned market launch in late 2007. More orders are expected for the remaining time of 2007, 2008 and coming few years. Turnover derived from these products should contribute a tremendous increase in group turnover in the coming years. The division also looks forward to co-operating further with iRobot and other name brand owners to capture the tremendous market potential.
The materials development business line, which was developed to moderate the cyclical fluctuations of the core toys business, is currently in transition to a more sophisticated business platform. The Group has been actively developing more high technology products, such as Indium Tin Oxide ("ITO") powder and target. ITO powder is used in the production of cathode ray tube ("CRT") displays for television ("TV") sets and computers. ITO target, made from ITO powder, is used to produce thin transparent electricity conductive film e.g. TFT-LCD used for LCD TV sets and computer monitors.
Confident about the tremendous market demand and extensive applications of ITO products, the Group has expanded its R&D capabilities by collaborating with Guangzhou Research Institute of Non-ferrous Metals.
With a strong financial position, the Group plans to pursue new investment opportunities. Since the Group was engaged in the production of ITO products, it has explored opportunities in investing upstream in raw materials for Indium production, as well as other potential businesses in the PRC in relation to the natural resources sector. Such pursuits included possible investments in zinc and lead mines, which yield upstream materials for Indium refinement.
As at March 31, 2007, the Company had aggregate cash in hand of HK$151 million and a net asset value of HK$650 million. Current ratio (current asset divided by current liabilities) stood at a healthy level of 2.5 times.
About Kin Yat Holdings Issued by : Through :
Hong Kong, July 22, 2007 - Toys, motors and electrical appliances manufacturer Kin Yat Holdings Limited (HKEx: 638) today announces that in the year ended March 31, 2007, turnover rose 18% to a record level of approximately HK$920,944,000. Profit attributable to equity holders of the Group also grew 12% to HK$67,183,000. The growth in both turnover and net profit was mainly due to the strong order intake. The Group declared a final dividend of HK5 cents, which together with the interim dividend of HK2 cents, represents a payout ratio of 42%.
Year ended March 31,
2007
2006
HK$ '000
HK$ '000
Turnover
920,944
778,293
Toys and related products616,809
491,464
Motors (sales to external customers only)226,747
179,701
Electrical appliances50,418
57,976
Material development26,970
49,152
Net profit attributable to equity holders of the Company
67,183
59,901
Segment Results from operating activities
Toys and related products44,055
44,471
Motors44,364
40,872
Electrical household appliances867
(907)
Material development(3,767)
2,270
Final dividend per share
HK5 cents
HK4 cents
Earnings per Share
- Basic
HK16.57 cents
HK14.80 cents
- Diluted
HK16.54 cents
HK14.76 cents
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, optical disk and material manufacturing businesses, all based on its strong cost-effective engineering and production platform in Shenzhen and Shaoguan, China.
Kin Yat Holdings Limited
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Angus Ho or Jeannie Ng
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