Q3 Sales Up 22.9%; Profit for the Period Down 75.6%
Consecutive Growth in Gross Profit Margin from Q1 to Q3
HONG Kong, Oct. 29 /Xinhua-PRNewswire/ -- J.I.C. Technology Company Limited ("J.I.C." or "the Company") (Stock code: 987), a Hong Kong's leading manufacturer of Liquid Crystal Display ("LCD") panels and modules, today announced the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the third quarter of 2007 and nine months ended 30 September 2007.
The Group recorded sales of HK$183.7 million for the third quarter of 2007, an increase of 22.9% over the same period last year. This growth of sales was attributable to the growth in the business of LCD modules that accounted for 60.9% of the total sales in the third quarter of 2007.
Gross profit however dropped by 20.0% from HK$28.3 million to HK$22.6 million when compared with the same period last year. Similarly, gross profit margin dropped about 6.6% to 12.3%, when compared with the same period last year. Taking account of a write-off of income tax recoverable of HK$2.0 million on 2005 profit reinvestment, profit for the period was HK$3.0 million in the third quarter of 2007 as compared with HK$12.4 million for the same period last year.
As for the nine months ended 30 September 2007, the Group recorded sales of HK$487.9 million which represented a growth of 29.7% over the same period last year. Although the gross profit in the second and the third quarters have improved from the first quarter of 2007, they were not enough to make an impact on profit for the period for the nine months ended 30 September 2007 of HK$9.3 million, compared with HK$27.9 million in the same period last year.
Nevertheless, the Group has completed its expansion in the capacity of LCD module assembly. The optimization of bottlenecks and productivity reduces overhead expenses and improves yields such that the gross profit margin rose from 9.9% in the first quarter to 10.8% in the second quarter, and further to 12.3% in the third quarter of 2007. The Group is confident to continue this improvement to give a respectable gross profit in the fourth quarter of 2007.
In the third quarter of 2007, the Group has successfully started a pilot production of module assembly for small-medium sized coloured TFT displays, which shall open up a new category of even higher value LCD module business.
The LCD market conditions remain highly competitive and challenging. In order to sustain continuous growth of the business, the Group believes and continues to pursue the business of higher value LCD module products. The Group will also continue its efforts in gaining more market share in Europe, United States and North-East Asia in applications such as telecoms, white goods, industrial instruments, medical appliances and automotives.
Meanwhile, the management continues to take remedial actions and implement cost control measures to maintain the consecutive growth in gross profit margin and to achieve better financial results of the Group for the coming quarters.
Group Reorganization by Nam Tai Electronics, Inc. ("NTE Inc.")
On 8 October 2007, the Company announced jointly with Nam Tai Electronic & Electrical Products Limited ("NTEEP") that its parent company, NTE Inc. intends to reorganize the group structure of its subsidiaries (including the Company) in an effort to realize many of the same benefits that NTE Inc. hoped to achieve by its proposed privatization of the Company in 2005. The management of NTE Inc., the Company and NTEEP consider that a centralized management of all the manufacturing businesses with greater economies of scale would be beneficial to continued growth of the combined businesses as a whole. Details of the benefits of the reorganization to the Company are set out in the aforesaid announcement.
This reorganization proposal requires the approval of the majority of the independent shareholders of the Company and NTEEP at their respective extraordinary general meeting which are scheduled to be held in November 2007. Circulars containing further details of the reorganization will be despatched to the shareholders of the Company and NTEEP as soon as possible in compliance with the requirements of the Listing Rules.
About J.I.C
J.I.C. specializes in the design, manufacture and marketing of LCD panels and modules. Its products are widely applied to different kinds of portable electronic devices, such as watches, calculators, personal digital assistants, mobile phones, car audio devices and instruments. J.I.C. has already built up a strong customer base producing for globally well-known electronic brands, including Nanox, Stanley, Uniden, Vtech, Casio Computer and Polar. In addition, J.I.C.'s LCD production base is located in Shenzhen, PRC. Its LCD panels' production capacity is in the leading league among other counterparts.
J.I.C. is one of the subsidiaries of Nam Tai Electronics, Inc. ("NTE") (New York Stock Exchange symbol: NTE). NTE is an electronics design and manufacturing services provider to many of the world's leading original equipment manufacturers, including Epson, Canon, Optrex, Seiko Instruments, Sharp, Sony Corporation, Sony Ericsson, Texas Instruments, Toshiba and others. It manufactures high-quality telecommunications products, palm-sized PCs, personal digital assistants, linguistic products, calculators and components such as LCD modules, wireless communication terminals and their modules, and CMOS sensor modules.
For more information about J.I.C., please visit its website at www.jic-group.com. For more information about NTE, please visit its website at www.namtai.com.
J.I.C. Technology Company Limited
KEY HIGHLIGHTS
(In thousands of HK Dollars, except as otherwise stated)
Quarterly Results Nine Months Results
Q3 2007 Q3 2006 YoY (%) 9M 2007 9M 2006 YoY (%)
Sales (Revenue) 183,724 149,545 22.9 487,903 376,079 29.7
Gross profit 22,603 28,253 (20.0) 54,285 68,861 (21.1)
% of sales 12.3% 18.9% 11.1% 18.3%
Operating income(a) 5,550 13,903 (60.1) 8,477 31,575 (73.2)
% of sales 3.0% 9.3% 1.7% 8.4%
Per share (HK cent(s)) 0.73 1.82 (60.1) 1.11 4.14 (73.2)
Profit for the
period(b) 3,015 12,372 (75.6) 9,346 27,950 (66.6)
% of sales 1.6% 8.3% 1.9% 7.4%
Basic earnings per
share (HK cent(s)) 0.39 1.62 (75.6) 1.22 3.66 (66.6)
Diluted earnings per
share (HK cent(s)) 0.39 1.62 (75.6) 1.22 3.66 (66.6)
Weighted average
number of
shares (‘000)
Basic 763,535 763,535 763,535 763,535
Diluted 763,535 763,535 763,535 763,535
Notes:
(a) Operating income = gross profit + other income - selling and
distribution costs - administrative expenses - research and
development expenditure.
(b) Profit for the period has taken account of two items: (i) income tax
credit relating to a deferred tax income of approximately HK$384,000
and HK$6,213,000 in the third quarter of 2007 and the nine months
ended 30 September 2007 respectively arising as a result of the
changes in the PRC income tax law effective from year 2008 and
onwards; and (ii) a write-off of income tax recoverable of
approximately HK$2,040,000 owing to an unsuccessful tax refund
application by the PRC subsidiary on its 2005 profit reinvestment.
For more information, please contact:
Kee Wong
Tel: +852-2263-1065
Fax: +852-2263-1223
Email: lkwong@namtai.com.hk
