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KIN YAT HOLDINGS LIMITED
Order book for new series of blockbuster-movie toys and iRobot
fills up production lines up to 2Q 2009

Hong Kong, November 2, 2008 - Toys, electrical appliances and motors manufacturer Kin Yat Holdings Limited (HKEx: 638) announces the commencement of mass production of the new series of movie-and-entertainment toys to tie in with several blockbuster movie releases coming in 2009 and 2010. Confirmed orders for artificially intelligent (“AI”) appliances, highlighted by vacuum cleaning robots developed with the NASDAQ-listed iRobot Corporation (“iRobot”), will also sustain production well into the second quarter of 2009.

The line-up of movie-and-entertainment toys series for 2009 and 2010 includes products for Transformer 2, X-Men Origins: Wolverine, Iron Man 2 and GI Joe: Rise of Cobra, with an estimated total order size of about HK$150 million and occupying the Group’s production lines up to the second quarter of 2009.

Mr Vincent Fung Wah-cheong, Deputy Chairman, Kin Yat Holdings, remarked: “The launch of action hero films and other movies generates good toy production opportunities. We were very impressed with the toy products sales derived from some blockbuster movies released in 2007. Such orders have exceeded forecasts, as the movies received excellent box office success. New releases in 2009 and 2010 are expected to help sustain momentum for segment sales.”

The Group’s strategy to focus on movie-related toys has also helped to extend the traditional peak season, from June to September, for Thanksgiving and Christmas shipments, to virtually all year round. This allows the Group to fully maximize utilization of its manufacturing capabilities and manpower productivity.

The AI electrical appliances segment has become a star performer for the Group. With positive market acceptance of the new vacuum cleaning robots, the Group has stepped up cooperation with iRobot to continue existing lines and to develop other AI electrical household appliances. The iRobot line of products currently maintains a monthly capacity of 50,000 units.

“Based on robust fundamentals, we continue to hold a positive outlook for the AI electrical appliances segment, and after the initial burst of phenomenal growth, we expect the pace of segment sales to ease off to a healthy longer term level of sustainable growth for the Group,” said Mr Fung.

For the year ended March 31, 2008, the Group announced a 78% year-on-year increase in turnover to a record level of HK$1,637,242,000. Profit attributable to equity holders of the Group also grew 75% to another record level of HK$117,268,000, primarily benefiting from economies of scale.

The Group’s three-pillar business structure ensures the Group a steady income stream that provides a solid platform for it to engage in projects with higher earnings potential. In the previous financial year, the three core operations of toys, electrical appliances and motors contributed respectively 45%, 38% and 17% of turnover to the Group.

Mr Fung went on to say that: “While we relish the success of our efforts, we must recognize that the tasks ahead to ensure resilience are more strenuous. The operating environment has become very challenging, amidst extreme market volatilities, rising costs for manufacturers in the Pearl River Delta, and global credit tightening in the aftermath of the financial market collapse.”

The commencement of Kin Yat’s third manufacturing base in Shaoguan since the last quarter of 2007 provides timely relief when it comes to controlling production costs through relocation of more toys lines to this lower-cost base. For fiscal 2008/09, the Group expects 90% of its toys and 40% of appliances production to be relocated to Shaoguan. At the same time, the shift to high value-added products and a more diversified product portfolio is also an ongoing initiative for the Group.

Cost savings are also achieved through more efficient production processes, enhanced equipment and automation, and ever closer vertical integration.

As at March 31, 2008, the Company had aggregate cash in hand of HK$100 million and a net asset value of HK$790 million. Current ratio (current assets divided by current liabilities) stood at a healthy level of 1.9 times.

Facilities in Shenzhen and Shaoguan