Announces Interim Results of 2001      Posted on 06 Dec 01

Hong Kong, December 6, 2001 - Laminates manufacturer, Kingboard Chemical Holdings Limited (SEHK: 148) today announces its unaudited interim results for the six months ended September 30, 2001. The Group recorded profits attributable to shareholders of HK$184,368,000 on a turnover of HK$1,206,881,000, a slight advancement from the turnover of corresponding period last year of HK$1,205,355,000 against a very tough business environment in the global electronics industry during the six-month period. The directors recommend the payment of an interim dividend of HK3.5 cents per share.

During the period under review, despite the prevailing deflationary environment in the electronics industry, the Group recorded around 15% growth in paper and glass epoxy laminates` sales volume. Such growth was mainly attributable to the Group`s ability to initiate prompt and right response to the customers` needs, capability of expediting production output and competence in executing effective cost control measures.

Against the backdrop of a severe downturn in the electronics industry worldwide, demand in China has been relatively firm and the Group was able to increase its laminates market share in China.

expertise marketing teams located in Beijing, Shanghai, Fujian, Shenzhen, Jiangmen and Hong Kong, the Group succeeds in clinching orders from our clients and expanding our market share in China," noted Mr Paul Cheung Kwok-wing, Chairman of Kingboard Chemical.

"The Group believes sensible investments amidst a downturn normally provide the best returns. During the period, we continued our strategy in fuelling our capacities and strengthening our capabilities. New facilities have been added to our portfolio and the Group has achieved an excellent position to capture any rebound in the industry," continued Mr Cheung.

During the six months under review, a glass epoxy laminate production line each in Kunshan and Jiangmen was set up with each line having the initial capacity of 200k sheets per month and the flexibility to reach 300k sheets. Production capacity of copper foil has also been increased by 33% to 1,600 tons with the completion of a new phase at the copper foil plant. Adding to these, the glass fabric plant has been equipped with more weaving machines and is capable of producing 8 million meters per month.

A key material for producing glass epoxy laminates and initially developed for internal use and as part of the vertical integration plan, epoxy resin has a wide range of applications in semiconductor packaging, cohesive materials, coating, insulation and construction industries. The Group`s recently completed resin plant in Nansha of Guangzhou has an annual capacity of 25,000 tons which not only succeeds in serving the Group`s internal demand but also achieves profits since October. To fuel further growth and profits, in tandem with an expansion plan in the pipeline, the Group has been engineering steps to achieve notable sales of epoxy resin to outside parties in the near future.

"Looking forward, the Group believes that the recovery of demand for printed circuit boards (PCBs) and in turn laminates will only be a matter of time. China`s entry into World Trade Organization (WTO) will attract more investments in PCBs production facilities, facilitating the country to post the world`s highest growth of demand for laminates. Against this backdrop, we have been adding capacity in China to serve more customers, shifting product mix to multi-layer applications to reach untapped segments, and increasing vertical integration to expand margins. In addition, the Group has an all rounded, seasoned management team. All these serve to cement the Group`s prominent position in the industry as well as the China market," concluded Mr Cheung.

Kingboard`s near term development also includes the prospective acquisition of a number of formalin plants in Guangdong which upon completion will double Kingboard`s share of the formaline market to around 70% in the local province.

Kingboard Chemical, the leading Hong Kong and PRC laminates manufacturer and one of the largest in the world, with more than 10 plants operating in different parts of China, has successfully integrated vertically in-house the production of copper foil, glass fabric and bleached kraft paper needed for its laminates business. The Group has the honour of being named one of the "World`s 200 Best Small Enterprises" by FORBES Global for two consecutive years in 2000 and 2001 and one of the "20 Best Managed Companies in Hong Kong" in an institutional investors survey conducted by Asia Money magazine in December 2000.

Financial Highlights

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Kingboard Chemical Holdings Limited