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Willas-Array Achieves 44% Growth In Interim Net Profit To HK$15.4 Million

Nov 27, 2002

Singapore - 27 November 2002 - Willas-Array Electronics (Holdings) Limited ("Willas-Array"), one of the largest Hong Kong-based distributors of electronics components in the Asia Pacific region, has achieved a 44% growth in net profit of HK$15.4 million for the six months ended 30 September 2002. This was compared to HK$10.7 million achieved in the corresponding period. Sales were up 23% to HK$616.7 million from HK$500.9 million in the same period last year.

Based on the existing issued share capital, earnings per share was up 29% to 5.78 HK cents compared to 4.47 HK cents previously, while net tangible asset per share rose to 83.8 HK cents from 78.45 HK cents.

Executive Chairman, Mr Lawrence Leung said, "We have benefited from the replenishment of inventory by the overall electronics industry and our strengthened sales efforts in the first half of the financial year. I am pleased to report that our balance sheet has remained healthy."

As at 30 September 2002, the debtors and inventory turnover ratios remained at a very reasonable level of 2 months and 1.7 months respectively.

Based on the geographical breakdown of the Group's results which is organised in accordance with the customers' place of origin, Hong Kong remained the biggest contributor, accounting for 76% of turnover. However, a significant part of the electronic components sold to Hong Kong-based customers are exported to the PRC.

The rising shipments of components to manufacturing facilities in the PRC boosted sales to Hong Kong-based customers by 21% to HK$467.7 million from HK$384.3 million previously. Correspondingly operating profit rose 31% to HK$35.4 million from HK$27.0 million, reflecting the improvement in operating margin from 7% to 7.6%.

Direct sales to customers in the PRC grew 28% to HK$137.8 million from HK$107.8 million. However, operating profit fell to HK$1.7 million from HK$3.3 million due to initial start-up costs, mainly for the increase in staff and training programmes, as the Group continues to expand its operations in the PRC. During the year, we set up a logistics hub in Shanghai to provide logistics support for our PRC business.

Looking ahead, the Group continues to see the PRC as the market with the greatest growth potential. According to the Semiconductor Industry Association1, the consumption of semiconductor is increasingly moving to Asia, especially China. In 2001, the Asia-Pacific semiconductor consumption accounted for 29% of total sales, which is expected to rise to 37% in 2002. This constitutes the largest one-year shift in consumption patterns in history, reflecting the rapid shift of contract manufacturing operations to China, as well as increasing numbers of chipmakers moving into the region.

The Asian chip market is projected to generate the most growth this year, with sales rising by 30% to US$52 billion.

"With the global uncertainty, it is difficult for us to predict the performance in the coming months. However, we expect the PRC to maintain its growth momentum resulting from its entry into WTO and the global outsourcing trend. Riding on this growth, coupled with our proven profitable business model and track record in managing change, we are confident that we will deliver long term sustainable growth for the Group and increase shareholders' value," said Mr Leung.


Established since the early 1980s, Hong Kong-based Willas-Array is principally engaged in the distribution of active and passive electronic components for use in the audio/video, telecommunications, industrial, consumer and computer segments. Backed by long-standing relationships with over 20 reputable Principals, Willas-Array carries a wide product mix distributing and marketing in excess of 10,000 product items which cater to over 2,000 active customers. Its main markets are in Hong Kong and the PRC.

In the PRC, Willas-Array has established a network of representative offices strategically located in Beijing, Guangzhou, Shanghai, Shenzhen, Qingdao, Xiamen, as well as an Application and Development Division in Guangzhou. It has a subsidiary in the Free Trade Zone within Shanghai that will serve as a logistics centre for the Group in China. In South Korea, Willas-Array has a subsidiary which commenced operations in May 2002