Man Sang Holdings, Inc. (the "Company") (NYSE Amex: MHJ) announced
the following, with regards to the Form-10Q filed with the SEC this
morning:
Business Review
The Group had two primary business segments during the three
months ended June 30, 2009. One business segment is engaged in the
purchase, processing, assembling, merchandising and wholesale
distribution of pearls and jewelry products ("Pearl Operations")
and the other is engaged in real estate development and real estate
leasing ("Real Estate Operations"). Net sales for the three months
ended June 30, 2009 decreased by HK$40.8 million to HK$48.6
million, consisting of HK$45.4 million attributable to Pearl
Operations and HK$3.2 million attributable to Real Estate
Operations.
Gross Profit
Gross profit decreased by HK$21.1 million, or 57.7%, from
HK$36.6 million for the three months ended June 30, 2008 to HK$15.5
million for the three months ended June 30, 2009, consisting of
HK$13.5 million attributable to our Pearl Operations and HK$2.0
million attributable to our Real Estate Operations.
Net income attributable to Man Sang Holdings, Inc. decreased by
HK$3.5 million, or 83.4%, from HK$4.2 million for the three months
ended June 30, 2008 to HK$0.7 million for the three months ended
June 30, 2009.
Pearl Operations
Net sales attributable to our Pearl Operations decreased by
HK$36.4 million, or 44.5%, from HK$81.8 million for the three
months ended June 30, 2008 to HK$45.4 million for the three months
ended June 30, 2009. Decreases in net sales attributable to our
Pearl Operations were primarily due to a decrease in market demand
in the United States and other regions due to the current global
economic contraction and recession. Net sales to the United States
market decreased by HK$9.5 million, or 52.0%, from HK$18.3 million
for the three months ended June 30, 2008 to HK$8.8 million for the
three months ended June 30, 2009. Net sales to the Europe market
decreased by HK$8.5 million, or 23.6%, from HK$36.1 million for the
three months ended June 30, 2008 to HK$27.6 million for the three
months ended June 30, 2009.
Gross profit attributable to our Pearl Operations decreased by
HK$18.5 million, or 57.9%, from HK$32.0 million for the three
months ended June 30, 2008 to HK$13.5 million for the three months
ended June 30, 2009. Gross profit margin decreased from 39.1% for
the three months ended June 30, 2008 to 29.6% for the three months
ended June 30, 2009. The decrease in gross profit margin was
primarily due to the mounting pressures to cut prices amid the
current global economic downturn.
Real Estate Operations
Net sales attributable to our Real Estate Operations decreased
by HK$4.3 million, or 57.3%, from HK$7.5 million for the three
months ended June 30, 2008 to HK$3.2 million for the three months
ended June 30, 2009. The decrease was primarily due to a decrease
in demand for shops and booths in China Pearls and Jewellery City,
as a result of a decrease in consumer demand for pearls and
jewelry.
Gross profit attributable to our Real Estate Operation decreased
by HK$2.6 million or 56.2% from HK$4.6 million for the three months
ended June 30, 2008 to HK$2.0 million for the three months ended
June 30, 2009. Gross profit margin attributable to our Real Estate
Operation increased from 61.1% for the three months ended June 30,
2008 to 62.7% for the three months ended June 30, 2009. Gross
profit margin varied depending on the location of the shop or booth
unit in China Pearls and Jewellery City. More centrally located
shop and booth units command relatively higher prices.
Gross rental income decreased by HK$0.2 million, or 2.7%, from
HK$6.0 million for the three months ended June 30, 2008 to HK$5.8
million for the three months ended June 30, 2009. The decrease was
primarily attributable to a decrease of HK$0.5 million in rental
income attributable to Man Sang Industrial City, due to a decrease
in occupancy rate from 87% as of June 30, 2008 to 82% as of June
30, 2009. The decrease was partially offset by an increase of
HK$0.3 million in rental income attributable to China Pearls and
Jewellery City.
Future Trends
Despite signs of stabilization in economic conditions following
a series of stimulus measures, there is still a high degree of
economic uncertainty which makes it difficult for us to assess
credit and capital markets, the future direction of economic
conditions and the further effects these factors could have on the
global economy. Customers remain cautious about increasing their
levels of inventories, which adversely affects demand for our
products in our Pearl Operations. In the meantime, investor demand
for real estate in the PRC has declined significantly reflecting a
reduction of capital invested in the market. A further recessionary
economic cycle, higher levels of unemployment, higher consumer debt
levels, or other economic factors could further adversely affect
our results of operations.
Looking ahead, we anticipate the global economic environment
will continue to stabilize and recover slowly over the coming year.
We will continue to monitor the effects of the financial crisis in
the markets where we operate and to adopt appropriate business and
financial management policies in order to capture business growth
opportunities when economic conditions improve.
Complete filing can be found on the SEC website at:
http://www.sec.gov/cgi-bin/browse-edgar?company=MAN+SANG+HOLDINGS+INC&match=&CIK=&filenum=&State=&SIC=&owner=
include&action=getcompany
ABOUT MAN SANG HOLDINGS, INC.
Man Sang Holdings, Inc. is principally engaged through
subsidiaries in the purchasing, processing, assembling,
merchandising and wholesale distribution of pearls, pearl jewelry
products and jewelry products. In addition, Man Sang Holdings,
Inc., through its subsidiaries, owns and operates commercial real
estate for lease and sale in Hong Kong and the People's Republic of
China.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, which are, by their nature, subject to risks and
uncertainties. This Act provides a "safe harbor" for
forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify
these statements as forward-looking and provide meaningful
cautionary statements identifying important factors that could
cause actual results to differ from the projected results. All
statements, including statements regarding industry prospects and
future results of operations or financial position, made in this
press release are forward looking.
Words such as "may," "believes," "will," "expect," "project,"
"estimate," "intend," "anticipate," "plan," "continue"" and similar
expressions may identify forward-looking statements. These
forward-looking statements include, without limitation, statements
relating to: the Company's future performance, the Company's
expansion efforts, the state of economic conditions and the
Company's market. These forward-looking statements are based on
assumptions and analyses made by the Company in light of its
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors the
Company believes to be appropriate in particular circumstances.
However, whether actual results and developments will meet the
Company's expectations and predictions depends on a number of known
and unknown risks and uncertainties and other factors, any or all
of which could cause actual results, performance or achievements to
differ materially from the Company's expectations, whether
expressed or implied by such forward-looking statements (which may
relate to, among other things, the Company's sales, costs and
expenses, income, inventory performance, and receivables).
Primarily engaged in the processing and trading of pearls and
pearl jewelry products, and in real estate investment, the
Company's ability to achieve its objectives and expectations are
derived at least in part from assumptions regarding economic
conditions, consumer tastes, and developments in its competitive
environment. The following assumptions, among others, could
materially affect the likelihood that the Company will achieve its
objectives and expectations communicated through these
forward-looking statements: (i) that low or negative growth in the
economies or the financial markets of its customers, particularly
in the United States and in Europe, will not occur and reduce
discretionary spending on goods that might be perceived as
"luxuries"; (ii) that the Hong Kong dollar will remain pegged to
the US dollar at US$1 to HK$7.8; (iii) that customer's choice of
pearls vis-à-vis other precious stones and metals will not change
adversely; (iv) that the Company will continue to obtain a stable
supply of pearls in the quantities, of the quality and on terms
required by the Company; (v) that there will not be a substantial
adverse change in the exchange relationship between the renminbi
("RMB") and the Hong Kong or US dollar; (vi) that there will not be
substantial increase in tax burden of subsidiaries of the Company
operating in the PRC; (vii) that there will not be substantial
change in climate and environmental conditions at the source
regions of pearls that could have material effect on the supply and
pricing of pearls; and (viii) that there will not be substantial
adverse change in the real estate market conditions in the PRC and
in Hong Kong.
The discussion of our results of operation, and liquidity and
capital resources should be read in conjunction with the financial
statements and the notes thereto included elsewhere in this release
and Form 10-K and with the Company's quarterly report on Form 10-Q,
both of which can be obtained on the Company's website on
www.man-san.com. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date of this release. The Company will not publicly release any
revisions to these forward-looking statements after the date
hereof. Readers are urged, however, to review the factors set forth
in reports that the Company files from time to time with the
Securities and Exchange Commission.
CONTACT: Man Sang Holdings, Inc. Mr. Martin Pak Phone: (852)
2317 9368 E-mail: Email Contact The Altman Group Patricia
Baronowski Email Contact
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