Man Sang Holdings, Inc. reported that net sales for the nine months ended Dec. 31, 2008, fell 12.8 percent to HK$277.8 million ($35.8 million). Revenues from its pearl operations totaled HK$266.8 million ($34.4 million) and revenue from its real estate operations totaled 11 million ($1.4 million) for the period.

Gross profit for the Hong Kong-based company decreased 3.1 percent to HK$103.9 million ($13.4 million) for the nine-month period, consisting of HK$97.5 million ($12.5 million) attributable to its pearl operations and HK$6.4 million ($825,450) attributable to its real estate operations.

Net income fell 65.6 percent to HK$5.8 million ($748,114) for the nine-month period.

The company has two primary business segments. Its first is engaged in the purchase, processing, assembling, merchandising, and wholesale distribution of pearls and jewelry products. The company is one of the world’s largest purchasers and processors of saltwater cultured and freshwater cultured pearls. Its second business segment, which began in April 2007, is in real estate development and real estate leasing primarily in China Pearls and Jewellery City in Zhuji of Zhejiang Province, China, and at Man Sang Industrial City, an industrial complex, located in Gong Ming Zhen, Shenzhen.

Pearl operations net sales fell 16.3 percent to HK$266.8 million ($34.4 million) for the nine-month period, due primarily to a decrease in market demand in the United States and Asia and because of the relative weakness of the United States economy and the continued global financial crisis, the company said.

Net sales to the United States declined 29.3 percent to HK$62 million ($8 million) for the period. Net sales to the Asian market decreased 42.4 percent to HK$52.4 million ($6.7 million). The market in Europe increased 7.5 percent to HK$128.9 million ($16.6 million).

Gross profit attributable to the company’s pearl operations dropped 9.1 percent to HK$97.5 million ($12.5 million) for the nine-month period.

Gross profit margin for its pearl operations increased from 33.6 percent for the nine months ended Dec. 31, 2007, to 36.5 percent for the nine months ended Dec. 31, 2008, the company said. The increase in margin was primarily due to cost controls, increased production efficiency due to the acquisition of new machinery, and a shift in focus to sales of higher value jewelry products.

Net sales from its real estate operations was HK$11 million ($1.4 million) for the nine-month period. Gross profit from real estate sales was HK$6.4 million ($825,497). Gross profit margin attributable to real estate sales was 58.4 percent. Gross rental income increased to HK$18.6 million ($2.4 million) for the period because of a HK$13 million ($1.6 million) increase in rental income from CP&J City and HK$2 million ($257,955) increase at Man Sang Industrial City.

JCK