Announces Annual Results for 2001Posted on 28 Jun 01

Hong Kong, June 28, 2001 - Laminates manufacturer Kingboard Chemical Holdings Limited (SEHK: 148) today announces the annual results for the year ended March 31, 2001. The Group had another remarkable year, with record turnover and profits. In the year, the Group posted over 50% growth in profit attributable to shareholders to HK$408 million (excluding the gain of HK$178.4 million from the spin-off of the copper foil business in the financial year 2000), on a turnover of HK$2,416 million, which also surged over 50%. Pre-tax profit margin also rose from 18.7% of the previous year to 21.6%, with earnings per share up 54% to HK86.6 cents. The directors recommend the payment of a final dividend of HK7.0 cents.

In the year under review, the Group registered marked revenue growth as a result of continued efforts to strengthen operations across the board, with focus on the manufacture of laminates and related products. Against the background of strong market demand, current monthly production capacities of paper laminates and glass epoxy laminates (FR4) increased by 46% to 1.9 million sheets and 100% to 800,000 sheets. The Group has also been successful in shifting its product mix to higher-margin FR4 which are used for the production of double-sided and multi-layered printed circuit boards (PCB).

During the year, FR4 sales posted strong growth of 210% and accounted for close to 40% of total turnover compared with only 29% in the previous year. There had also been expansion of Kingboard`s lead in the paper laminates market, in which the Group believes it had the highest global share of over 10%. Paper laminates are mainly used for the production of single-sided PCBs and posted robust growth of 23% last year.

Mr Paul Cheung Kwok-wing, Chairman, Kingboard Chemical noted, "Glass fabric is the key material for the production of FR4, and in tandem with the growing capacity of FR4, we have completed the phase 2 of the glass fabric plant. Over 400 weaving machines are now in operation, with monthly capacity doubling from the previous year to top 7 million metres."

"The capacity of copper foil was expanded to 1,200 tonnes, an increase of 71% from the previous year. The new hydrogen peroxide plant, which commenced operation early in the year, now produces 4,000 tonnes monthly. The plant has already posted profits in the first 12 months of commercial production," continued Mr Cheung.

Kingboard has spent on average 3% of annual turnover on research and development in the past few years. On top of the expansion of in-house R&D capabilities, the Group has also commissioned joint venture programmes with leading research centres, including the establishment of Zhejiang University-Kingboard Polymer Research Centre in the year. New laminate products such as flame-retardant paper laminates and glass epoxy laminates for multi-layered PCBs were introduced during the year to capture new market demands. The Group has also started the production of bleached kraft paper and hydrogen peroxide, both of which are now profitable. In addition, the copper foil production lines are ready for the commercial production of 12-micron thickness copper foil pending industry demand.

Overseas sales of laminates were an unprecedented success, up over 280% from the previous year. Overseas sales accounted for 12% of the Group`s turnover compared with only 5% in the financial year 2000. The Group`s world class products now command a wide stretch of overseas markets including South Korea, Europe and the USA. They are denominated in US dollars and mostly settled by letters of credit, thereby enhancing the Group`s debtor profile.

Mr Cheung concluded, "We will continue to put strong emphasis on product development which includes the introduction of high-performance FR4, and on expanding FR4`s production capacity to 1.4 million per month."

Kingboard Chemical is a leading manufacturer of laminates, operating more than 10 plants in China, all vertically integrated with in-house production facilities for copper foil, glass fabric and hydrogen peroxide. It is the largest Hongkong-based laminates manufacturer in Hong Kong and China, as well as one of the world`s largest laminates manufacturers.

The Group was named one of the "World`s Best 300 Small Companies" by FORBES Global in October 2000, as well as one of the "Top 20 Best Managed Companies in Hong Kong" in a survey of institutional investors by Asia Money in December 2000.

Financial Highlights

* Excluding the gain of HK$178.4 million from the spin-off of the copper foil business.

Issued by :
Kingboard Chemical Holdings Limited