First Service Holding Limited — Earnings Release 2001

Apr 26, 2002

Man Yue International Holdings Limited

萬裕國際集團有限公司*

(Incorporated in Bermuda with limited liability)

ANNOUNCEMENT OF FINAL RESULTS

FOR THE YEAR ENDED 31 DECEMBER, 2001

On behalf of the Board of Directors of Man Yue International Holdings Limited (the "Company") and its subsidiaries (hereinafter collectively referred to as the "Group"), I am pleased to present the audited results of the Group for the year ended 31 December 2001.

Year ended

31 December 2001

2001 2000

Notes HK$'000 HK$'000

TURNOVER 1

Continuing operations 330,511 338,651

Discontinued operations - 87

330,511 338,738

Cost of sales (240,047 ) (263,956 )

Gross profit 90,464 74,782

Other revenue and gains 2,687 1,679

Selling and distribution costs (14,707 ) (9,291 )

Administrative expenses (61,037 ) (62,164 )

Other operating expenses (4,732 ) (17,787 )

PROFIT/(LOSS) FROM OPERATING ACTIVITIES 2

Continuing operations 23,042 1,597

Discontinued operations (10,367 ) (14,378 )

12,675 (12,781 )

Finance costs (8,117 ) (7,883 )

4,558 (20,664)

Share of profits less losses of:

Jointly controlled entities 1,248 1,701

Associates 38 (301 )

PROFIT/(LOSS) BEFORE TAX 5,844 (19,264 )

Tax 3 (508 ) (1,911 )

PROFIT/(LOSS) BEFORE MINORITY INTERESTS 5,336 (21,175 )

Minority interests (121 ) -

NET PROFIT/(LOSS) FROM ORDINARY

ACTIVITIES ATTRIBUTABLE TO

SHAREHOLDERS 5,215 (21,175 )

EARNINGS/(LOSS) PER SHARE 4

Basic HK1.4 cents HK(6.2) cents

Diluted N/A N/A

NOTES

1. TURNOVER AND SEGMENTAL INFORMATION

The following tables present turnover and profit/(loss) from operating activities for the Group's business and geographical segments.

Group

Segment Turnover Segment Results

2001 2000 2001 2000

HK$'000 HK$'000 HK$'000 HK$'000

Continuing Operations:

Electronic components and

electrical products 315,216 304,332 22,230 13,191

Raw Materials 10,959 30,463 479 (3,540 )

Corporate and Others 4,336 3,856 333 (8,054 )

Discontinued Operations:

Provision of portal services - 87 (10,367 ) (14,378 )

330,511 338,738 12,675 (12,781 )

Hong Kong 156,291 231,442 1,108 (2,804 )

Elsewhere in the PRC 59,247 62,423 5,573 (1,135 )

Southeast Asia 71,536 26,355 4,100 (301 )

Other countries 43,437 18,518 2,490 (212 )

Corporate and others - - (596 ) (8,329 )

330,511 338,738 12,675 (12,781 )

2. PROFIT/(LOSS) FROM OPERATING ACTIVITIES

The Group's profit/(loss) from operating activities is arrived at after charging:

2001 2000

HK$'000 HK$'000

Depreciation 16,733 9,371

Amortisation of trademark and website development costs 525 226

Loss on trading securities, net - 207

3. TAX

Hong Kong profits tax has been provided at the rate of 16% (2000: 16%) on the estimated assessable profits arising in Hong Kong during the year. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.

2001 2000

HK$'000 HK$'000

Group:

The People's Republic of China (the "PRC"):

Hong Kong, SAR:

Provided for the year - 1,391

Under/(over)provision in prior year (575 ) 8

Elsewhere 1,083 -

508 1,399

Jointly controlled entities:

PRC, other than Hong Kong - 512

Tax charge for the year 508 1,911

4. EARNINGS/(LOSS) PER SHARE

The calculation of basic earnings/(loss) per share is based on the net profit attributable to shareholders for the year of HK$5,215,000 (2000: net loss of HK$21,175,000), and the weighted average 373,440,000 (2000: 340,662,797) ordinary shares in issue during the year.

No diluted earnings per share for the year ended 31 December 2001 has been shown as the Company's share options did not have a dilutive effect.

Diluted loss per share for the year ended 31 December 2000 has not been shown as the share options outstanding had an anti-dilutive effect on the basic loss per share.

DIVIDENDS

The Board of Directors does not recommend the payment of any dividend for the year (2000: Nil).

COMMENTARY ON ANNUAL RESULTS

Review of 2001 results and segmental performance

2001 was a challenging year for Man Yue, characterized by a very difficult commercial environment. The Group achieved a turnover of HK$330,511,000 and a profit attributable to shareholders of HK$5,215,000. Profit derived from continuing operations, that is, excluding the loss of HK$10,367,000 attributable to the

e-commence business, was a turnaround of HK$15,582,000, compared to a loss of HK$6,797,000 last year. Earnings per share for the year ended 31 December 2001 were HK 1.4 cents (2000: Loss per share HK 6.2 cents). With the decision to terminate the e-commerce business amidst the burst of the worldwide e-commerce bubble, the Group refocused on its core business of manufacturing and trading of electronic components successfully adjusting the sales mix by expanding sales to various industrial sector. The improvements in the financial performance of the Group were also due to the successful diversification into other markets and successful implementation of higher-valued items into our product mix.

During the year ended 31 December 2001, the Group increased its shareholding in Wuxi Heli Electronic Co., Ltd. ("WHE"), a former jointly controlled entity of the Group, from 48.4% to 71.1%, thereby consolidating its results for the year 2001. The Management believes this will enhance the Group's presence in the manufacturing and trading of electronic components in the PRC, and will open an avenue to market its products locally in the PRC.

In terms of the geographical distribution, sales in countries other than Hong Kong and PRC increased from approximately 13.2% to 34.8%, amounting to HK$114,973,000 (2000:HK$44,873,000) mainly contributed by the growth in S.E. Asia market. Sales to Hong Kong customers decreased from approximately 68.3% to 47.3%, amounting to HK$156,291,000 (2000:HK$231,442,000), with sales to the PRC market maintained at around 18%.

Financial Position and Liquidity

As at 31 December 2001, shareholders' funds stood at HK$200,947,000 (2000: HK$194,419,000). Current ratio maintained at 1.30 (2000:1.30), and long-term liabilities to equity ratio reduced slightly to 6.5% (2000:7%).

The Group mainly finances its business with internally generated cash flows and revolving credit facilities provided by the Group's principal bankers and hedges its credit risk through Export Credit Insurance cover. Apart from improving the working capital cycle, the management will continue to pursue a prudent financial management approach to suitably adjust its borrowing mix to reduce its funding costs, striking a proper balance in its disposition of funds to meet its debt obligations, daily operations and capital expenditure for growth.

The Group conducts business transactions in Hong Kong dollars, Renminbi, and US dollars. As Hong Kong dollar is pegged to US dollar and there has not been any major fluctuation in the exchange rate between Renminbi and Hong Kong dollar, the Group does not foresee any high exchange risk in this respect.

Save as disclosed to the audited financial statements, the Group has no material contingent liabilities.

Staff and organization

As at 31 December 2001, the Group had 69 staff in Hong Kong (2000:92) and employed a total workforce of 1,728 (2000:1,334) inclusive of its operations in China. Remuneration is generally determined by reference to market indicators and the performance, qualification and experience of individual employees. Other benefits include share option scheme, contributions to statutory mandatory provident fund scheme and medical scheme to its employees in Hong Kong and the statutory central pension schemes to its employees in the PRC.

Prospects and strategy

China's prospects are promising with its recent accession to the World Trade Organization and expected to provide significant investment incentives for overseas investors. Leveraging on the Group's successful manufacturing and selling track records of its own "Samxon" brand, the Board intends to adopt a two prong approach: intensifying its OEM business to world-renowned brands, and continue developing products under its own "Samxon" brand. While continuing to strengthen its presence in the PRC, the Group will continue to expand its market share in overseas markets. In terms of product mix, the Group intends to enhance the manufacturing of high value capacitors that give better profit margins. In addition, the Group will seek further improvements in its inventory level, debtor turnover period and will make better use of bank financing.

PURCHASE, SALE OR REDEMPTION OF SHARES

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any listed securities of the Company during the year ended 31 December 2001.

CLOSURE of register of members

The Register of Members of the Company will be closed from Tuesday, 14th May, 2002 to Tuesday, 21st May, 2002, both days inclusive, during which period no transfer of shares will be effected. In order to ascertain the right to attend the meeting, all transfer, accompanies by the relevant share certificates, must be lodged for registration with the Company's branch share registrars in Hong Kong. Tengis Limited at the 4/F, Hutchison House, 10 Harburt Road, Central, Hong Kong not later than 4:00 p.m. on 13th May 2002.

PUBLICATION OF FURTHER INFORMATION ON THE STOCK EXCHANGE'S WEBSITE

All the financial and other related information of the Company required by paragraphs 45(1) to 45(3) of Appendix 16 of the Listing Rules will be published on the Stock Exchange's website in due course.

APPRECIATION

On behalf of the Board, I would like to take this opportunity to thank all members of the Board and all our staff for their hard work, support and dedication to the Group during the past year.

By Order of the Board

Chan Ho Sing

Chairman

Hong Kong, 25th April, 2002

"Please also refer to the published version of this announcement in the iMail and Hong Kong Economic Times Journal both dated 26th April, 2002."

* For identification purpose only.

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Man Yue International Holdings Limited ("the Company") will be held at 16th Floor, Yiko Industrial Building, 10 Ka Yip Street, Chai Wan, Hong Kong on Tuesday, 21st May 2002 at 3:00 p.m. for the following purposes:

1. To receive and consider the audited accounts and the reports of the directors and auditors for the year ended 31st December 2001;

2. To re-elect Mr. Lo Kwok Kwei David as independent non-executive Director;

3. To fix independent non-executive directors' remuneration;

4. To fix the maximum number of directors at 10;

5. To authorise the board of directors to appoint additional directors up to the maximum fixed by the shareholders of the Company;

6. To re-appoint Messrs Ernst & Young as auditors and authorise the board of directors to fix their remuneration;

7. As special business to consider, and if thought fit, pass the following resolutions as Ordinary Resolutions:

"A. THAT:

(i) subject to paragraph A(iii) below and pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the exercise by the directors of the Company during the Relevant Period (as defined below) of all the powers of the Company to issue, allot and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved;

(ii) the approval in paragraph A(i) above shall be in addition to any other authorisation given to the directors of the Company and shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period;

(iii) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph A(i) above, otherwise than pursuant to (a) a Rights Issue (as defined below), (b) the exercise of options granted under the Share Option Scheme (as defined below) or (c) any scrip dividend scheme or similar arrangements, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution and the authority pursuant to paragraph A(i) above shall be limited accordingly; and

(iv) for the purposes of this resolution:

"Relevant Period" means the period from the time of passing of this resolution until whichever is the earliest of:

(a) the conclusion of the next annual general meeting of the Company;

(b) the expiration of the period within which the next annual general meeting of the Company is required by Bermuda law or the Company's bye-laws to be held; and

(c) the time at which the authority set out in this resolution is revoked or varied by way of ordinary resolution of the shareholders of the Company in general meeting.

"Rights Issue" means an offer of shares in the capital of the Company open for a period fixed by the directors of the Company to holders of shares in the Company whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares, subject to such exclusion or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of or the requirements of any recognised regulatory body or any stock exchange in any territory applicable to the Company.

"Share Option Scheme" means the employee share option scheme adopted by the Company on 13th February, 1997 pursuant to which the Company may grant to employees of the Company and its subsidiaries options to subscribe for shares in the capital of the Company.

B. THAT:

(i) subject to paragraph B(iii) below, the exercise by the directors of the Company during the Relevant Period (as defined below) of all the powers of the Company to repurchase its own issued shares on The Stock Exchange of Hong Kong Limited ("the Stock Exchange") or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose on the terms and subject to the conditions set out in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited or any applicable laws and requirements of any other stock exchange as amended from time to time be and is hereby generally and unconditionally approved;

(ii) the approval in paragraph B(i) above shall be in addition to any other authorisation given to the directors of the Company;

(iii) the aggregate nominal amount of the shares repurchased or agreed conditionally or unconditionally to be repurchased by the Company pursuant to the approval in paragraph B(i) above shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution and the authority pursuant to paragraph B(i) above shall be limited accordingly; and

(iv) for the purpose of this resolution:

"Relevant Period" means the period from the time of passing of this resolution until whichever is the earliest of:

(a) the conclusion of the next annual general meeting of the Company;

(b) the expiration of the period within which the next annual general meeting of the Company is required by Bermuda law or the Company's bye-laws to be held; and

(c) the time at which the authority set out in this resolution is revoked or varied by the shareholders of the Company by way of ordinary resolution in general meeting.

C. THAT:

Conditional upon the passing of resolutions numbered 7A and 7B set out above, the aggregate nominal amount of the number of shares which are repurchased by the Company under the authority granted to the directors of the Company in the said resolution numbered 7B shall be added to the aggregate nominal amount of the issued share capital of the Company that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to the said resolution numbered 7A provided that such added amount shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution."

By Order of the Board

Ho Wing Kuen

Secretary

Hong Kong, 25th April 2002

Principal Office:

16th Floor

Yiko Industrial Building

10 Ka Yip Street

Chai Wan

Hong Kong

Notes:

1. Every member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. In order to be valid, a form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power or authority must be deposited at the Company's branch share registrar in Hong Kong, Tengis Limited at 4/F, Hutchison House, 10 Harcourt Road, Central, Hong Kong not less than 48 hours before the time appointed for holding the meeting (or any adjournment thereof).

3. The Register of Members of the Company will be closed from Tuesday, 14th May 2002 to Tuesday, 21st May 2002, both days inclusive, during which period no transfer of shares will be effected. In order to ascertain the right to attend the meeting all transfers accompanied by the relevant share certificates must be lodged for registration with the Company's branch share registrars in Hong Kong, Tengis Limited at the above address not later than 4:00 p.m. on Monday, 13th May 2002.

Hong Kong, 25th April, 2002

"Please also refer to the published version of this announcement in the iMail and Hong Kong Economic Times Journal both dated 26th April, 2002."

* For identification purpose only.

Please also refer to the published version of this announcement in the HK i-Mail.