Man Sang Sales Up 8.7%

Man Sang Holdings, Inc. reported Tuesday that net sales increased by 8.7 percent to HK$210.1 million ($27 million) for the six months of its fiscal year, year-over-year.

The Hong Kong-based company said that the overall rise for the period, ended Sept. 30, was primarily due to a 19 percent increase in sales of assembled pearl and jewelry finished products and a 5.2 percent increase in sales of South Sea pearls. The company said it expects the growth in the pearl segment to continue.

In the U.S., net sales increased 27.7 percent for the six-month period, year-over-year.

Gross profit margin increased year-over-year, from 30.9 percent to 34.9 percent—mainly due to the company’s efforts in controlling processing cost and attained production efficiency.

The company noted that during the reporting period, it acquired additional interests in the Zhuji Project located in Zhuji, Zhejiang province, the PRC—increasing its ownership from 49 percent to 55 percent. The company said it expects the Zhuji project, a major trading platform for pearls and jewelry in the PRC, to broaden its customer base.

In it’s outlook, Man Sang said defaults in sub prime mortgages triggered a global aversion to risk. In the face of this economic uncertainty, the company said its customers in the U.S. appeared to “slow-down their purchasing decisions. As a result, the growth of net sales in the United States market slowed down in the second quarter compared with the first quarter.”

However, the company says it doesn’t expect this slowdown trend to spread to other regions.

In addition, Man Sang said it expects demand for luxury products to continue to increase along with continued improvement in global economic conditions.

“These factors should benefit the core business segment of South Sea pearls and assembled jewelry products of the company,” the company said.

Man Sang said it expects that the phase one of the Zhuji project will be completed in 2008 as planned. The tenants of approximately 600 units which previously occupied the existing old jewelry market in Zhuji have agreed to move into our newly-built Zhuji’s jewelry city and will occupy approximately 30 percent of the total units of the Jewelry City.

The company said it expects that its property development segment will continue to be “one of the core businesses of the company and will contribute sustainable growth.”

Man Sang Holdings, Inc. and its subsidiaries (together the “Man Sang Group”) are one of the world’s largest purchasers and processors of Chinese cultured and freshwater pearls. The Man Sang Group is principally engaged in the purchasing, processing, assembling, merchandising, and wholesale distribution of pearls, pearl jewelry, and other jewelry products. In addition, the Man Sang Group owns and operates the Man Sang Industrial City, an industrial complex, located in Gong Ming Zhen, Shenzhen Special Economic Zone, PRC.