Hong Kong, December 18, 2001 - Casual fashion footwear manufacturer Kingmaker Footwear Holdings Limited (SEHK: 1170) today announces that the for six months ended September 30, 2001, the Group's turnover advanced 8.2% to HK$629,958,000. Net profit attributable to shareholders decreased by 8.8% to HK$75,105,000. Basic earnings per share were HK11.84 cents. The Group announces an interim dividend of HK3.5 cents, a 10% increase compared to previous period after accounting for the bonus shares issued.

"We take pride to announce that our company was selected one of the 'Best 200 Small Companies in the World' by Forbes Magazine. The recognition came as an encouragement to management and provided an impetus to our continued advancement in the footwear industry during a tough operating environment," said Mr Mickey Chen Ming-hsiung, Chairman and Managing Director of Kingmaker Footwear Holdings.

The first half of this year saw an erosion of global demand for consumables, and the footwear industry was further affected by such exceptional events as the outbreak of mad-cow disease in Europe and the September 11 attacks in America.

The period also witnessed a significant growth in popularity of the more casual looking and less costly "athleisure" footwear. With an increased production capacity, Kingmaker was able to quickly adapt to this market change.

The baby-shoes program remained a strong engine of growth for the Group. During the period, sales of children's footwear increased 32% compared with the previous period.

The 5 largest branded customers during the last six months were Skechers, Timberland, Stride Rite, Caterpillars and Clarks, with other major customers including Bates, Merrell, Paul Smith, Sperry, Sperry Topsider, Stride and Tommy Hilfiger.

Five production lines have already been put into operation in Vietnam currently with a utilization rate of 50-60%. This new operation was already able to contribute to the Group's profitability in the past few months. "Although the performance of the European market fell slightly below our expectations due to the weak Euro, we still maintain an optimistic view of the future profitability of the Vietnam operation, especially after the significant reduction of tariff on exports from Vietnam to the US. The Vietnam plant is now undergoing an efficiency enhancement program with a view to further increasing its capacity. There is also a plan to phase in the establishment of new lines in Vietnam, which envisages a total of 12 production lines in 3 to 4 years." continued Mr Chen.

The production base in the PRC will continue to be strengthened, with the construction of the new footwear producing factory in Zhongshan close to completion. The first phase of the project will involve the setting up of 6 production lines, which are scheduled to become operational by April 2002. Upon full operation, the factory in Zhongshan will house 12 production lines.

The performance of the newly established wholesale and retail operation in the PRC continued to measure up to management's business targets. The sales network in the PRC comprises about 200 points, and to keep pace with future developments, an additional office was established in Shanghai in November 2001. Management is confident of the development of the wholesale and retail business and targets to achieve breakeven within this financial year.

The Kingmaker Group is a world leading manufacturer of casual fashion and baby footwear. It currently has a workforce of 10,000 on 25 production lines, 17 of which are in the PRC, 3 in Macau and 5 in Vietnam. The Group was named one of "The Best 200 Small Companies in the World" by Forbes Magazine in its October 2001 issue.

Issued by :
Kingmaker Footwear Holdings Limited

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