Man Sang International 2000/01 Annual Results

Turnover Increases 11.4%

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Actively Promotes South Sea Pearls &

Pearl Jewelry Business

(Hong Kong, June 28, 2001) – Man Sang International Limited (“Man Sang”) (stock code: 938) today announced its annual results for the year ended March 31, 2001.

In the fiscal year of 2000/01, the Group recorded a turnover of approximately HK$311.1 million, representing an increase of 11.4% as compared to last year.

The U.S. economy, acting as the global economic indicator, slowed down with weakened consumer sentiment during the year under review. Buyers were highly cautious when placing orders. While in Europe, the Euro was too weak to encourage imports. Yet, the Group has been working very hard to minimize the adverse effects of the unfavourable global economy by virtue of its solid experience in the industry and flexible marketing strategies.

Last year saw the Group’s initial endeavours to explore e-commerce and continuous efforts to expand its pearl jewelry business, which both required investment to put up new infrastructure, thus causing an inevitable increase in administrative expenses. In addition, the supply of Chinese pearls, which referred to freshwater pearls in particular, had increased significantly and continuously dropped in price. To cope with the market trend, the Group decided to write down value on certain inventories, to a relatively large extent, at approximately HK$65.4 million. For these reasons, the Group recorded a loss to shareholders of approximately HK$49.8 million.

Cheng Chung Hing, Chairman of Man Sang said, “The write-down of certain inventories affected our profitability in the short-run, however, after the write-down, the Group will become more flexible in its marketing and sales strategies and better-prepared for future growth.”

Despite the fact that the Group was not performing well last year, it has always been financially sound. As at March 31, 2001, the cash on hand was approximately HK$114.0 million, which has been sufficient to sustain the Group’s daily operations and expenses. The gearing ratio was 33.8%.

For the traditional pearl business, due to the further improvement on the quality of South Sea pearls and a slight increase in supply, its price was adjusted accordingly and became more competitive and attractive. Strong global demand for South Sea pearls had made it well sought after in the jewelry market. During the year, the Group promoted South Sea pearls vigorously to further strengthen its market share.

He continued, “Sales of South Sea pearls were remarkable, soaring by 82% as compared to last year. It accounted for approximately 42% of the Group’s total turnover, increasing from 25% in the previous year.”

Besides, the supply of Chinese freshwater pearls and Chinese cultured pearls increased significantly in the year and their prices continued to soften. Buyers’ confidence was affected. Despite their abundant supply, their quality was improving. The Group believes that once prices are stabilized, another surge in the demand cycle will boost the market.

The demand for pearl jewelry products was rising. The Group underwent an internal restructure on product development. Expertise and vigorous efforts were put on South Sea pearl and Chinese freshwater pearl jewelry in particular, and integrating with various value-added services to suit the demand of different countries. Though the Group is still incubating its pearl jewelry business, the management has every confidence in its promising future and firmly believes that it will bring better returns to the Group.

The PRC economy has been growing with huge potential in the jewelry retail market. To capture these business opportunities, the Group had set up a total of six jewelry outlets in the PRC, in Nanjing, Shenyang, Dailin and Hangzhou respectively. All these outlets were performing steadily. Following the PRC’s accession into the WTO, she will definitely have an economic take-off. The demand for jewelry will surge and the tide will turn in the Group’s favor.

In the past year, the Group engaged in e-business through its subsidiary, Cyber Bizport Limited. Its B2C website, www.4376zone.com, had celebrated its first anniversary in the year. Despite that its performance was not as good as expected, the Group would dedicate itself to diversifing its contents, products and markets to provide more pleasure in online shopping. The Group will persist in stringent costs control, minimize expenses and so strengthen the effectiveness of its operations.

About Man Sang International:

Man Sang International was listed on the Hong Kong Stock Exchange in 1997. It is the first pearl company to be listed in Hong Kong. Its principal activities include the purchasing, processing, assembling, merchandising and wholesale distribution of pearls and pearl products, including Chinese cultured pearls, Chinese freshwater pearls, Japanese cultured pearls, Tahitian and South Sea pearls. It operates its own pearl processing facilities in Shenzhen, the PRC.

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