Man Sang Holdings Pearl Sales Down 9.3%

Man Sang Holdings, Inc. on Thursday reported that net sales for the six months ended Sept. 30, decreased 5 percent to HK$199.5 million ($25.7 million), compared with the same six-month period of the prior year. The decrease was wholly attributable to its pearl operations, the Hong Kong-based company said.

Its pearl business reported HK$190.4 million ($24.5 million) in sales and its real estate business reported HK$9.1 million ($1.1 million) in sales for the six-month business.

The company has two business segments: One is engaged in the purchase, processing, assembling, merchandising, and wholesale distribution of pearls and jewelry products; and the other is engaged in real estate development and real estate leasing, which includes the development and management of the China Pearls and Jewellery City in Zhuji of Zhejiang Province, China.

Gross Profit
The company reported that year-over-year gross profits increased 5.1 percent to HK$76.9 million ($9.9 million) for the six months ended Sept. 30, consisting of HK$71.5 million ($9.2 million) attributable to its pearl operation and HK$5.4 million ($696,694) attributable to its real estate operations.

Net income decreased 26.9 percent year-over-year to HK$9.2 million ($1.2 million) for the six-month period.

Pearl Operations
Net sales to its pearl operations decreased 9.3 percent year-over-year to HK$190.4 million ($24.5 million) for the period. The company said the decrease was primarily the result of a decline in market demand in the United States and Asian countries, including Hong Kong, due to the relative weakness of the United States economy and global financial crisis.

Net sales to the United States decreased 27.8 percent year-over-year to HK$43.9 million ($5.6 million)for the six-month period. Net sales to the Asia market decreased 29.2 percent to HK$42.6 million ($5.4 million). Net sales to the Europe market increased 11.1 percent, to HK$86.2 million ($11.1 million).

Gross profit attributable to its pearl operations decreased 2.3 percent year-over-year to HK$71.5 million ($9.2 million) for the six-month period.

Gross profit margin increased to 37.6 percent for the six-month period, from 34.8 percent for the prior six-month period ended Sept. 30, 2007. The increase in gross profit margin was primarily due to our continued implementation of effective cost controls, enhancement of production efficiency, and a shift in its sales focus to sales of higher value jewelry products, the company said.

Real Estate Operations
Net sales attributable to the company’s real estate operations was HK$9.1 million ($1.2 million) for the six months ended Sept. 30. Gross profit attributable to real estate sales was HK$5.4 million ($696,720). Gross profit margin attributable to real estate sales in its real estate operations was 59.2 percent for the period. The company said it have real estate sales during the corresponding six months ended Sept. 30, 2007.

Gross rental income increased 367.9 percent year-over-year, to HK$12.4 million ($1.6 million) for the period. The increase was primarily attributable to an increase of HK$8.6 million ($1.1 million) in rental income attributable to CP&J City. It did not have any rental income attributable to CP&J City for the prior year’s six-month period. In addition, it had additional rental income of HK$1.1 million ($141,924) from our operations at Man Sang Industrial City as additional units which had been held for itself that was leased to customers.