Hong Kong, July 8, 2001 - Brown shoes and fashion casual footwear manufacturer Kingmaker Footwear Holdings Limited (SEHK: 1170) today announces the results for the year ended March 31, 2001. In the year, Kingmaker's turnover increased by 8.4% to HK$1,057,599,000, with a net profit attributable to shareholders of HK$148,845,000, also up 15.86%. Basic earnings per share were HK25.87 cents, a 15.59% increase. The directors recommended a final dividend of HK7 cents.

"Despite tough market conditions, we have achieved another year of record turnover and profit. These remarkable results were attributable to our dedicated efforts to maximize productivity, improve profit margins and expand production lines, as well as our uncompromising focus on brown shoes and fashion casual footwear, a niche product line that commands a niche market," said Mr Mickey Chen Ming-hsiung, Chairman and Managing Director, Kingmaker Footwear Holdings.

To sharpen its edge and increase its penetration of the footwear market, the Group has continued to seek product diversification. The production of high-value baby and children's footwear was one example under such initiative. This business line has become an important revenue generator for the Group and an engine for growth during the year. Following the success of the first baby-shoes programs, the Group was commissioned by Stride Rite to produce a new "Toddler Tech" line of baby footwear, which uses the latest gate technology and which has been a major success in the US since its launch.

Last year, Kingmaker captured another new trend - that of "athleisure" footwear. This new line of footwear combines the chic look of white athletic shoes with the less costly outsole of brown shoes, to produce a new, competitively priced footwear line. Management considers the "athleisure" line one of the Group's main growth drivers for the future.

During the year, the Group's production capacity was further expanded following the commencement of operations at its Vietnam facility in February 2001. With a designed total capacity of 8 lines, the Vietnam factory has increased its production lines to 5 since February this year. Additional lines will be phased in over the next two years. The Group's capacity expansion has progressed in line with its plan to capture a larger market share in Europe, which contributed 23% of Kingmaker's revenue last year, up from 21.97% of the previous year.

In order to maintain its competitiveness and in anticipation of rising operating costs in Zhuhai as the economic zone becomes more developed, management is seeking to establish new facilities in other parts of China. A new factory is now being planned in Zhongshan. Land has been identified and the blueprint of the new facilities envisages a total of 12 lines there.

The new wholesale and retail operation has performed well and the number of sales points in China has now topped 200, in line with management's targets. The retail environment in China is positive, but competitive. With the signing of famous athletic footwear brands such as Lotto and Head, management is confident of the positive development of this new business operation, which has prepared itself for a more rapid phase of growth with China's imminent WTO entry. An office was set up in Guangzhou recently to facilitate the development of this operation in Mainland China. To better manage the distribution network, the Group also plans to establish new offices in Beijing and Shanghai.

Further enhancement of the production flow was implemented last year, resulting in an even shorter turnaround time and lower stock levels. Such efforts are expected to help the Group strengthen its competitiveness in preparation for industry cycles and market changes.

Kingmaker Footwear Holdings Limited (SEHK: 1170) is a leading brown shoes and fashion casual footwear producer. Currently the Group has a workforce of 10,000, working on 25 production lines, 17 of which are in Mainland China, 3 in Macau and 5 in Vietnam. Last year, its largest 5 branded customers were Skechers, Timberland, Stride Rite, Wolverine and Caterpillar/Cat.

* Taking into account the dilutive effect due to the one-for-four-shares bonus issue in 1999/00, the final dividend per share increased by 25%.

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Kingmaker Footwear Holdings Limited

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