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Insignificant impact on the Group’s Business as a result of the Japanese Strong Earthquake
  2011-04-16 08:42:37

It has been more than one month since the unfortunate Japanese strong earthquake on 11 March, and the negative impact (if any) on particular industries and businesses are becoming increasingly clear. As far as our Group is concerned, the performance of our various business segments have remained stable thus far and overall sales revenue in 1Q has witness an increase of about 40%%* compared with the same period last year. Confirmed orders received thus far for April and May 2011 has also exceeded our expectation and therefore we have so far not witnessed any obvious direct negative impact as a result of the Japanese earthquake.  

In terms of raw materials procurement, the only raw material we used to import directly from Japan was certain PVC powders. Even though we do not envisage difficult in continuing to procure such raw material from Japan post the Japanese earthquake, we however in any event has sufficient stock currently and are able to readily source from the alternative suppliers from Korea, Taiwan and China mainland should the need arises.

In terms of sales, the manufacturing bases and the shipment destinations of our Japanese customers are predominantly located in areas such as China, Vietnam and Laos rather than Japan. As a result, their production operations were also not significantly affected by the Japanese earthquake. In addition, the sales revenue attributable to our Japanese customers is still currently relatively low at less than 5% of group total sales revenue. We therefore have not experienced any significant negative impact on our sales revenue as a direct result of the Japanese earthquake.

In terms of the supply chain of the consumer electronic industry, even though it has been reported in the media that as a result of the Japanese earthquake, certain products such as  semiconductor, LCD display panel, battery etc have experienced supply shortage, resulting in reduced supply and shipment of certain products such as LCD TV and notebook in recent weeks, we have however not experience in reduced procurement or cancellation of order of our products by our customers as a result of above. In contrast, as mentioned above, confirmed orders received thus far for April and May 2011 has exceeded our previous expectation and the Japanese earthquake have so far not negatively affect our position in the supply chain in which we operate in.

* Note that this is based on our internal unaudited management accounts and may not reflect the results of the Group for the year ending 31st December, 2011, investors and shareholders of the Company are advised to exercise extreme caution when dealing in the shares of the Company.

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