FUJIKON REPORTS REMARKABLE 2004/05 INTERIM RESULTS
TURNOVER JUMPED 81.1%
NET PROFIT SURGED 191.7%

GROWTH MOMENTUM IS EXPECTED TO CONTINUE INTO THE SECOND HALF OF THE FINANCIAL YEAR

(Hong Kong, 30 November 2004) - Leading Hong Kong electro-acoustic products designer and manufacturer Fujikon Industrial Holdings Ltd. ("Fujikon" or "the Group")(Stock Code: 0927) today announced its interim results for the six months ended 30 September 2004. 

For the six months ended 30 September 2004, the Group's total turnover significantly increased from HK$264 million in the same period last year to HK$479 million this year, representing an increase of 81.1%.  Boosted by the strong turnover growth, net profit attributable to shareholders increased from last year's HK$10.5 million to HK$30.6 million this year.  Basic earnings per share were HK8.3 cents (2003: HK2.9 cents).  Owing to the hike of raw material costs during the review period, and to a lesser extent, the commencement of bulk production of acoustic components which bears relatively lower margins, the Group's gross profit margin dropped slightly from 23.4% in 2003 to 21.1%.  Despite the effects of raw material costs on gross profit margin, thanks to its effective efforts to curb operational expenses, the Group's net margin increased from 4.0% last year to 6.4% this year.

The Directors recommended an interim dividend of HK2.5 cents per share for the six months ended 30 September 2004 (2003: HK2.5 cents per share).

The Chairman of Fujikon, Mr. Johnny Yeung, said, "Despite the significant rise in raw material costs, I am delighted to announce that we had an encouraging start this year.  We are happy to see the robust growth in both turnover and profit.  Such growth bears testimony to the success of our past investment in ramping up our production scale and perfecting our manufacturing techniques.  With strengthened and sharpened capabilities, we were able to capture many business opportunities during the period, particularly in the telecommunications industry."

Below is the summary of the geographical and product mix analysis:

Markets	For the six months ended 30 Sept 2004(HK$ million)	For the six months ended 30 Sept 2003(HK$ million)	Change	Percentage of total turnover in 2004 (2003)
North America	175.5	112.6	55.8%	36.7%(42.6%)
Asia Pacific Regions	159.1	90.4	76.0%	33.2%(34.2%)
Europe	79.2	43.6	71.8%	16.5%(16.5%)
Japan	57.4	6.7	760.9%	12.0%(2.5%)
Others	7.6	11.1	31.8%	1.6%(4.2%)

Products	For the six months ended 30 Sept 2004(HK$ million)	For the six months ended 30 Sept 2003(HK$ million)	Change	Percentage of total turnover in 2004 (2003)
Audio Products	142.6	123.2	15.8%	29.8%(46.6%)
Communication Products	93.9	26.7	252.3%	19.6%(10.1%)
Multimedia Products	23.0	22.2	3.8%	4.8%(8.3%)
Electro-Acoustic Parts	104.8	15.2	587.9%	21.9%(5.8%)
Electronic Products, Accessories and Others	114.5	77.2	48.3%	23.9%(29.2%)

During the review period, the Group's major markets continued to report growth in sales.  The Japanese market saw the most impressive growth in percentage terms, with business increased over 7-fold or 761%.  In absolute terms, the growth in North America and the Asia Pacific region (other than Japan) was the most significant.  The two markets together contributed a net turnover increase of over HK$131 million. The expansion of the PRC market accounted for 78% of the growth recorded inside the Asia Pacific region (other than Japan).  Much of that increase was from the growing PRC domestic sales of the Group's overseas customers.  Business turnover in the PRC therefore went up 123%. 

Mr. Yeung commented on the new geographical distribution pattern, "We are happy to see a significant growth in turnover from Japan and the Asia Pacific among our major markets, which represents a geographical redistribution of sales.  In the near future, we believe this growth pattern will continue, resulting in an even healthier and more balanced picture of sales distribution for us, and allowing the Group to reduce the risk of relying too much on the performance of any particular economy."

In terms of product mix, the Group has shifted its focus on the audio industry to the booming telecommunications industry.  During the period, the sustained growth of the telecommunication industry became the single most important driving force behind the Group's revenue increase.  It not only directly spurred the sales of communication products, which recorded a surge of 252.3%, but also stimulated the acoustic components business.

Moving forward, the robust mobile phone industry will continue to provide the Group with tremendous business opportunities.  In the meantime, the Group set up a joint venture, Sefco Inc., with Showa Eurex (H.K.) Co., Ltd in Japan, which will allow Fujikon to exploit opportunities arising from the enforcement of the legislation banning the use of handheld phones by drivers while driving. With the joint venture company up and running, Fujikon is well positioned to gain stronger customer confidence and further strengthen its foothold in the lucrative Japanese market.  The Group expects the Japanese market to contribute to its communication products business and bring in greater revenue to the Group.

In addition, to bring more values to its shareholders, Fujikon has persistently embarked on diversifying its business into new areas with growth potentials hence avoiding heavy reliance on the more matured sectors.  To achieve this end, the Group will be focusing on the in-car audio-visual entertainment market.  Although the new generation of in-car audio-visual entertainment business is still in its infancy, the Group registered an encouraging growth of over 70% of the business for the first six months of 2004/05 compared with the full 12 months of 2003/04.  The Group believes, given time to take off, the business will become a growth category in future.

Mr. Yeung concluded, "Looking to the future, we will focus on expanding our market and client base. On the other hand, to enhance our margins, we will also practice diligent cost control and strive to increase operational efficiencies, including increasing the production capacity of our plant in the PRC.  Based on the continuous sales orders from existing customers and the positive feedbacks from our potential clients, we are optimistic that the vibrant growth registered in the first half of 04/05 will continue in the second half of the year, bringing satisfactory returns to our shareholders."

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