t6pr.com - Kin Yat Holdings Limited (638)

KIN YAT HOLDINGS LIMITED
Acquires micro-motors manufacturing assets
from Sun Motor for HK$65 million

Hong Kong, December 5, 2008 - Toys, electrical appliances and micro-motor manufacturer Kin Yat Holdings Limited (HKEx: 638) announces that on November 22, 2008, a conditional sale and purchase agreement was entered into with Sun Motor Industrial Company Limited (“SMI”) and its trustee for the acquisition of all productive assets of SMI located at its Dongguan plant for a consideration of HK$65 million.

Established in 1983, SMI and its related group of companies (“Sun Motor Group”) designs and manufactures custom-designed and standard electric micro-motors, and has been experiencing financial stress. The consideration has been determined based on arm’s length negotiations in view of the financially distressed situation of SMI, and with reference to independent valuation reports. Through this transaction and other acquisitions, the Company will acquire substantially all fixed assets and inventories of Sun Motor Group.

Kin Yat branched out into micro-motor production in 1999 as part of its business diversification efforts. The motor business has performed well and generated healthy streams of income for the Group. In the year to March 2008, the motor segment of the Group generated external sales of HK$275.1 million, up 21% year on year. The productive assets of Sun Motor Group are supplementary to that of the Group’s core micro-motors operations.

Mr Cheng Chor Kit, Chairman of Kin Yat said: “With persistent efforts, we have developed the motors segment from a relatively small-scale operation to today’s scope and sophistication. The acquisition presents a good opportunity and high time for us to further our capacities and capabilities in general and for more types of products as well at a reasonable price to cope with the segment’s business growth and market development requirements. It will also enable us to benefit from enhanced economies of scale. We are optimistic about the long-term prospects of this business line.”

Over the years, the Group has significantly expanded the micro-motor segment’s capacity after relocating its production lines to Shaoguan, and broadened its customer base from a toys-focused portfolio to a more diversified end-user base. The segment’s output currently serves the requirements of various end-user sectors including toys, automotive, household and personal care products, and office automation and audio-visual equipment.

The acquisition is not expected to have material impact on the Group’s net assets. The Group intends to finance the transaction mainly by bank borrowings. 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 as at March 31, 2008.

The company has applied for the resumption of trading in its shares with effect from 9:30 am on December 4, 2008.

About Kin Yat Holdings
Kin Yat Holdings Limited (HKEx: 638) is an industrial group with a niche in electronic and mechanical production. It has a stretch of toy, electrical appliances and motor manufacturing businesses, all based on its strong cost-effective engineering and production platforms in Shenzhen and Shaoguan, China.

Issued by :
Kin Yat Holdings Limited

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