Monday, March 1, 2021
Martin Hennecke
HKEx Stock Code : 06838 
Corporate Profile
Principally engaged in the development and manufacturing of stainless steel products such as watch bracelets, costume jewellery, accessories, and mobile phone cases and accessories.

Business Review - For the year ended December 31, 2012

In 2012, the Group recorded an encouraging results by achieving a double-digit percentage growth of about 22.3% in turnover. The growth was mainly due to the broadening of customer base, product mix optimisation and better performance of the costume jewellery product segment. However, the increase in costs of production and on-going appreciation of Renminbi continued to put pressure on the margins of our products. We shall continue to pay extra attention to the changes in external environment and strive to advance our cost control and supply chain management so as to maintain a sustainable development for the Group.

The Group''''s principal focus is on the development and manufacture of premium stainless steel products. Our major business segments are, namely, watch bracelets, costume jewellery, accessories and parts for leather goods and mobile phone cases and parts.

Acquisition of Ming Fung Kitchen and Change of Use of Proceeds

On 15 May 2012, Super Powerful Limited ("Super Powerful"), an indirect wholly-owned subsidiary of the Company, entered into the master agreement ("Master Agreement") with Mr. Yiu Hon Ming and Mr. Li Huizhu in relation to the acquisition of the entire equity interest of Ming Fung Kitchen. Pursuant to the Master Agreement, Super Powerful conditionally agreed to (a) acquire the entire equity interest of Ming Fung Kitchen ("Sale Equity"), which is beneficially owned by Mr. Yiu Hon Ming, at a purchase consideration of RMB1,000,000 and (b) put funds in Ming Fung Kitchen for it to repay the loans in the amount of approximately RMB28,959,000 owed to Mr. Yiu Hon Ming and/or his associates. Ming Fung Kitchen mainly holds the sites of an aggregate area of 66,666 sq.m. located in Dongfeng Village, Huzhen, Boluo County, Huizhou, Guangdong Province, the PRC for industrial use, and the four buildings erected thereon.

This transaction was approved by independent Shareholders at an extraordinary general meeting held on 25 July 2012 and was completed on 30 November 2012. The construction of new factory and dormitory buildings for the initial stage of development commenced in January 2013 and shall be completed in phases by the end of 2013. The Group expects that the completion of the initial stage of the development will enhance the Group''''s existing production capacity in general by about 50%. The estimated capital expenditure for the initial stage of development of the new factory site is approximately RMB190,000,000, which was expected to be financed by internal resources of the Group and/or borrowings, and proceeds from the share offer made under the prospectus of the Company dated 30 June 2011 ("IPO"). The new factory and dormitory buildings are planned for the production of costume jewellery, accessories and parts for leather goods and mobile phone cases and parts, for a long-term basis.

With respect to the site situated at Huzhen, Boluo County, Huizhou ("Huzhen Site"), the Group would continue to negotiate with the local government authorities for the granting of the construction land quota and approval of the conversion of permitted land uses of Huzhen Site to industrial use.
In this connection, the Group has changed the purpose of utilising the proceeds from IPO to finance the development of the Dongfeng Village production facilities during the year, in place of the original plan to develop the Huzhen Site.

Business Outlook - For the year ended December 31, 2012

Whilst the Group has recorded satisfactory results for the year ended 31 December 2012, we recognise the challenges and opportunities in the year to come. Even though the economy in Europe was stablised provisionally, the recovery of the global economy was slow and the Western financials remain volatile. The economic growth of Asian-Pacific region, mainly driven by China has shown sign of slowdown. The inflation of labour and material cost in China, together with the appreciation of Renminbi will inevitably burden our operating costs. Nevertheless, with the acquisition of the new piece of land at Dongfeng Village for our expansion of our production capacity and the strengthened relationship with our broadened customers base of internationally renowned luxury brands, we stay cautious optimistic about the Group''s business in the year of 2013. The Group will continue to adopt stringent cost control measures in order to optimise our productivity to strive to maintain the profitability of the Group.

Source: Winox Holdings (06838) Annual Results Announcement
Chairman Yiu Hon Ming Issued Capital (shares) 500M
Par Value HKD 0.1 Market Capitalisation (HKD) 490M
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