NTEEP Announces 2008 Q3 Results

Q3 2008 Sales up 77.8%, Operating income down 51.5% and EPS at 0.40 US cent

HONG KONG, Nov. 3 /Xinhua-PRNewswire/ -- Nam Tai Electronic and Electrical Products Limited ("NTEEP" or "the Company") (Stock code: 2633), an electronics manufacturing and design services provider, today announced the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the third quarter of 2008 and the nine months ended 30 September 2008 respectively.

During the three months ended 30 September 2008, the Group recorded sales of US$160.5 million, representing an increase of 77.8%. Sales of the TCA segment (Zastron business unit) and LCDP segment (Jetup business unit) for the third quarter of 2008 decreased by 20.0% and 6.0% respectively when compared with the same period of 2007. These two business segments, TCA (Zastron business unit) and LCDP (Jetup business unit), acquired under the Reorganization contributed sales of US$94.7 million. As compared with the same period last year, sales of CECP segment (NTEEP business unit) decreased by 26.5%, which was mainly due to the significant decrease in sales of educational products and home entertainment devices.

Gross profit for the three months ended 30 September 2008 was US$16.5 million, almost flat to the same period last year. As compared with the same period last year, operating income and profit for the period attributable to the equity holders of the Company for the three months ended 30 September 2008 decreased by 51.5% and 70.3% respectively mainly because of the substantial reduction in profit contribution from the decrease of sales, and drop of exchange gain due to slow-down of RMB appreciation during the third quarter.

For the nine months ended 30 September 2008, sales of the Group increased by 105.6% from US$220.6 million to US$453.5 million when compared with the same period last year. As compared with the same period last year, gross profit and operating income increased by 50.8% and 5.5% respectively while profit for the period attributable to the equity holders of the Company for the nine months ended 30 September 2008 decreased by 53.2% because profit for the period attributable to the equity holders of the Company of the same period last year included the gain on disposal of investment in TCL Corp, having been offset by the impairment loss on goodwill arising from Namtek Group.

In 2008, global economic conditions have experienced a downturn from the sequential effects of the subprime lending crisis, general credit market crisis, collateral effects on the finance and banking industries, volatile energy costs, concerns about inflation, slower economic activity, decreased consumer confidence, reduced corporate profits and capital spending, adverse business conditions and liquidity concerns. These conditions make it difficult for our customers, our vendors and us to forecast and plan future business activities or expansion accurately, and they appear to have caused and may continue to cause, companies worldwide to slow spending generally and our customers to slow ordering and spending on our products specifically. If our customers’ markets continue to deteriorate because of these macroeconomic effects, our business, financial condition and results of operations will in turn likely be materially and adversely affected.

We cannot predict the timing or duration of the economic slowdown or the timing or strength of any subsequent economic recovery of markets worldwide or in the electronics manufacturing services industry in which we serve. The global adverse economic conditions we currently face could result, and we expect, barring an unexpectedly swift reversal of global economic trends, will result, in negative effects to our results of operations over the next several quarters. The business environment for us is made even more difficult as we continue to face factors that have adversely affected our operations such as the appreciation of the exchange rate of the renminbi to the US dollar, and the adverse effects of changing tax and labour laws in the PRC and the resulting increases in our overhead expenses and income taxes.

Under these circumstances, management has continued our strategy to concentrate our efforts to improve manufacturing efficiencies, broaden our product offerings and diversify our customer base. In addition, we are planning to streamline our supporting service team in Hong Kong and Macao to reduce overhead costs and accelerate our efforts to strengthen management controls. In operations, dealing effectively with competitive pressures to reduce unit pricing and with short product lifecycles have always been, and remain, our challenge. The Company plans to concentrate on production efficiencies and improving resources utilization in order to foster the Company’s ability to adapt readily to new product development and new requirements of customers.

About NTEEP

For more information about NTEEP, please visit its website at http://www.namtaieep.com. For more information about Nam Tai Electronics, Inc., please visit its website at http://www.namtai.com .

Nam Tai Electronic & Electrical Products Limited

2008 Q3 Results Key Highlights

(In thousands of US Dollars, except as otherwise stated)

Quarterly Results(a)

Q3 2008 Q3 2007 YoY

(%)

Sales (Revenue)(b) 160,534 90,276 77.8

Gross Profit 16,548 16,528 0.1

% of sales 10.30% 18.30%

Operating income(c) 5,823 12,004 (51.5)

% of sales 3.60% 13.30%

Per share (US cent(s)) 0.66 1.36 (51.5)

Profit for the period attributable to

equity holders of the Company(d) 3,566 12,026 (70.3)

% of sales 2.20% 13.30%

Basic earnings per share (US

cent(s)) 0.4 1.36 (70.6)

Diluted earnings per share (US

cent(s)) 0.4 1.36 (70.6)

Weighted average number of shares

(‘000)

Basic 881,671 881,671

Diluted(e) 881,671 881,671

Nine Months Results(a)

9M 2008 9M 2007 YoY

(%)

Sales (Revenue)(b) 453,540 220,569 105.6

Gross Profit 58,564 38,840 50.8

% of sales 12.90% 17.60%

Operating income(c) 29,153 27,635 5.5

% of sales 6.40% 12.50%

Per share (US cent(s)) 3.31 3.13 5.8

Profit for the period attributable to

equity holders of the Company(d) 20,648 44,099 (53.2)

% of sales 4.60% 20.00%

Basic earnings per share (US

cent(s)) 2.34 5 (53.2)

Diluted earnings per share (US

cent(s)) 2.34 5 (53.2)

Weighted average number of shares

(‘000)

Basic 881,671 881,671

Diluted(e) 881,671 881,671

Notes:

(a) Results in the third quarter and nine months ended 30 September 2008 included the results of Consumer Electronic and Communication Products (“CECP”) business segment (“NTEEP business unit”), Telecommunication Component Assembly (“TCA”) business segment (“Zastron business unit”) and Liquid Crystal Display (“LCD”) Products (“LCDP”) business segment (“Jetup business unit”) upon the completion of reorganization of Nam Tai Electronics, Inc. (NYSE stock code: NTE) (“NTEI”) and its subsidiaries (collectively “Nam Tai Group”) on 31 December 2007 (the “Reorganization”). Results in the third quarter and nine months ended 30 September 2007 included the results of CECP business segment only.

(b) Included sales from the TCA business segment and the LCDP business segment in the sum of US$244.8 million in the nine months ended 30 September 2008. TCA business segment and LCDP business segment became part of the Group upon the completion of Reorganization. If such sales had been excluded, sales of the Group would have decreased by 5.3% as compared with the nine months ended 30 September 2007.

(c) Operating income = gross profit + other income - other expenses - selling and distribution costs - administrative expenses - research and development expenditure.

(d) Included (i) a gain of US$43.8 million in the second quarter of 2007 on disposal of the investment in TCL Corporation (“TCL Corp.”); and (ii) a non-cash impairment loss of US$24.3 million in the second quarter of 2007 on goodwill arising from the Group’s acquisition of Namtek Group (comprising Namtek Japan Company Limited and Shenzhen Namtek Co., Ltd. in May 2005.

(e) Excluded outstanding share options of 19,740,000 which had not been exercised as at 30 September 2008 (as at 30 September 2007: 14,520,000). These outstanding share options consist of (i) 2,320,000 share options under the Pre-IPO Share Option Scheme adopted on 22 March 2004; and (ii) 17,420,000 share options granted to several directors and certain employees of the Group on 5 February 2008 under the Share Option Scheme adopted on 8 April 2004. The exercise period and exercise price of these newly granted share options are from 5 February 2008 to 4 February 2011 and HK$1.85 per share, respectively.

For more information, please contact:

Chan Bo Shan

Tel: 2263-1011

Fax: 2263-1223

Email: christenchan@namtai.com.hk