Asia Dekor Holdings Limited

Singapore, China, 23 May 2007/Xinhua-PRNewswire/ -- Asia Dekor Holdings Limited (Stock Code: A73.SI), a vertically integrated producer and distributor of laminate wooden floor and one of Asia's leading wood-panel producers, is pleased to announce its annual results for the year ended 31 March, 2007.

Financial Highlights

* Turnover of RMB 749,246,000 - Up 30.5%
* Net Profit of RMB 144,142,000 - Up 36.5%

For 12 months ended 31 March
(RMB'000)
2007 2006 Change
Turnover 749,246 574,001 +30.5%
Gross profit
(Gross profit margin) 206,421(27.6%) 163,805(28.5%) +26.0%
Net profit 144,142(19.2%) 105,629(18.4%) +36.5%
(Net profit margin)

Business review and growth momentums

The Group posted strong results for FY2007, which saw turnover rise by 30.5% to RMB 749,246,000 (FY2006: RMB 574,001,000) and profit attributable to shareholders increase by 36.5% to RMB 144,142,000 (FY2006: RMB 105,629,000).

Growth of the turnover and net profit during FY2007 was primarily attributed to sales of particleboards (new product) following the commencement of commercial operation of the Huizhou factory and the improvement in the overall operational efficiency in the year under review.

The Group's new product, particleboards, which only commenced mass production in August 2007, achieved remarkable results. During the year under review, approximately 123,000 cubic meters of particleboard were sold, contributing additional revenue of RMB 127 million to the Group. Sales of fiberboards to external customers increased significantly by 71.2% from 59,000 cubic meters in FY2006 to 101,000 cubic meters during FY2007.

Sales of laminate wooden flooring products were adversely affected by the impact of the macroeconomic controlling measures to cool down the real estate market in China. As a result, sales volume of the Group's laminate wooden flooring products decreased from 11.64 million square meters in FY2006 to 10.35 million square meters in FY2007.

During the year under review, gross profit increased significantly by 26.0% to RMB 206,421,000 as compared to RMB 163,805,000 in FY2006, while the overall gross profit margin decreased from 28.5% in FY2006 to 27.6% in FY2007 owing to a change in the product mix resulting from the introduction of particleboards which is an industrial, semifinished product with lower margin.

Share Placement

On 03 April 2006, the Group successfully placed out 50,000,000 new ordinary shares of HKD 0.15 each to the public at SGD 0.1425 per ordinary share. During the year, the net proceeds from the placement amounting to approximately SGD 6,900,000 was applied to repay a long-term bank loan which was drawn down for financing the construction of the Heyuan factory.

Outlook

The Group expects that the outlook of the laminate wooden flooring business remains challenging. The Chinese government is likely to impose further controlling measures on real estate sector to maintain stability. The Group will, however, continue to leverage on its strong branding of flooring products and the introduction of innovative products with better quality and design. In addition, the Group will work towards further increasing the export of laminate wooden flooring products. The management expect that the demand of the Group's wood-panel products, HDF, and particleboard, would continue to increase. The Group will undertake appropriate measures to mitigate margin pressure due to increasing wood material prices and chemical costs. The Group is continually seeking out new opportunities to widen its base in related businesses.

Company Background

Asia Dekor Holdings Limited was established in 1994 and listed on the Singapore Stock Exchange in November 1999. A leader in its industry, Asia Dekor is fully vertically integrated in the design, manufacture and sales and distribution of laminate wooden flooring and related products. Asia Dekor is also well recognized as one of the Asia's leading wood-panel producers. With the completion of the new particleboard factory in March 2006, the Group now has three production facilities in China, located in Shenzhen, Heyuan, and Huizhou, with an annual production capacity of 16 million square meters laminate wooden flooring products, 200,000 cubic meters fibreboards, and 200,000 cubic meters particleboards, respectively. Asia Dekor, through a joint venture, has a well- established distribution network, with more than 1700 exclusive distribution outlets throughout China. "Power Dekor," the flagship product of Asia Dekor, is the most recognised brand name in China's wooden flooring market.

Source: Asia Dekor Holdings Limited