Neo-Neon posts 2010 profit of HK$116mn

Group reported a HK$1.7bn turnover, an increase of 53.9% behind expanded production capacity.

World-leading decorative lighting manufacturer Neo-Neon Holdings Limited (“Neo-Neon”) announced its annual results for the 15 months between 1 January 2010 and 31 March 2011. This is the Group’s first annual results announcement following the change of its financial year end date to 31 March. The Group’s 2009 (“previous year”) results cover the period from 1 January to 31 December 2009.

During the period under review, the Group reported a turnover of HK$1,710,500,000, an increase of 53.9% year-on-year. Overall gross profit increased by 52.5% to HK$582,300,000 and gross profit margin was maintained at about 34.0%. Profit attributable to shareholders amounted to HK$116,000,000. Basic earnings per share were HK12.7 cents. The Board recommended a final dividend of HK3.2 cents per share. Including the paid interim dividend of HK2.8 cents per share, the total dividend amounted to HK6.0 cents per share, according to a Neo-Neon report.

Mr Ben Fan, Chairman of Neo-Neon, said, “Although the period under review was unpredictable and challenging and we were confronted with rising manufacturing and labour costs in the Mainland market, we were still able to improve our turnover and gross profit. We have also expanded our production capacity and completed the shift of the production of incandescent-based lighting and decorative lighting involving labour intensive processes to the plant in Thai Binh Province, Vietnam during the period to reduce cost pressures. In addition, we have also merged with three leading enterprises in the LED lighting segment in North America which has helped us to establish sales channels in that market, while expanding the Mainland market to capture its expected rapid growth in energy-saving LED lighting in the coming years”.

Prospects
The Group has offices in 16 countries and regions. It plans to continue to expand and consolidate its existing distribution channels and extend its market reach through mergers and acquisitions. Thus, it is well positioned to face the anticipated marketing explosion of environmentally friendly LED lighting.

In addition, the current emphasis on energy-saving from the Chinese Government provides excellent opportunities for the Group’s business expansion in domestic sales. Fifty PRC cities have embarked on the program of “Ten Cities, 10,000 Street Lights” Upgrade Project.

During the period, the Group has secured the order for LED tunnel lighting installed along the Wuhan-Guangzhou high-speed rail line. Its LED-based products were also widely deployed during the Opening Ceremony and seven theme galleries at the Shanghai World Expo. The Group has established 30 sales offices and allocated more resources to expand its presence in Mainland China. Apart from the flagship showroom already in place in Shanghai, the Group is planning to set up additional flagship showrooms in Tianjin and Chongqing aiming to consolidate a stronghold for the Group in one of the world’s fastest growing markets.

Mr Fan concluded, “Under the leadership of our professional management who are strategically astute and highly alert, as well as through our constant integration of market resources and our efforts in facilitating industry mergers through effectively utilisating industry-wide resources, we are confident that the Group will continue to maintain its leading role in the increasingly competitive LED industry, enlarge our LED market share and deliver the best return to our shareholders in the future”.