Ocean Grand Chemicals Holdings LimitedOcean Grand Chemicals Holdings Limited

Annual Results for the Year Ended 31 March 2003

Contents

Financial Highlights

Corporate Profile

Competitive Strengths

Future Plans & Strategies

Mission

Financial Highlights (1)

2003

HK$ ‘000

2002

HK$ ‘000 Change

TurnoverTurnover 434,202434,202 159,946 171%

Gross profitGross profit 79,69079,690 31,692 151%

Net profitNet profit 63,68963,689 23,193 175%

EPS EPS (Note 1)(Note 1) 13.41 cents13.41 cents 4.88 cents 175%

Dividend per shareDividend per share 4.0 cents4.0 cents Nil N/A

Note 1 – calculated based on 475,000,000 shares, the number of shares in issue immediately after the listing of the Company’s shares

Financial Highlights (2)

2003

HK$ ‘000

2002

HK$ ‘000

Change

HK$ ‘000

Cash on handCash on hand 36,63536,635 3,054 33,581

Cash inflow (outflow) from Cash inflow (outflow) from operating activitiesoperating activities

57,09857,098 (8,352) 65,450

Net assetsNet assets 154,828154,828 57,471 97,357

Total bank borrowingsTotal bank borrowings 30,53430,534 13,539 16,995

Gearing ratioGearing ratio 19.7%19.7% 23.6% 3.9%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2000 2001 2002 2003

159,946

90,985 92,643

Year ended 31 March

Turnover

CAGR 68%

(HK$’000)

434,202

Turnover by Product Category

Gold salts 38.9%

Palladium salts42.0%

Silver salts0.2%

Palladium saltssubcontracting 18.8%

For the year ended 31 March 2002

Rhodiumsalts 6.2%

Palladium salts41.7%

Sliver salts8.6%

Palladium salts subcontracting13.4%

For the year ended 31 March 2003

Gold salts 30.1%

0

10,000

20,000

30,000

40,000

50,000

60,000

2000 2001 2002 2003

23,19319,480

12,473

Year ended 31 March

Profit Attributable to Shareholders

CAGR 72%

(HK$’000)63,689

0

10

20

30

20020

10

20

30

2002

(%)

Year ended 31 March

Profit Margin

19.8%18.4%

(%)

Year ended 31 March

14.5%

Gross Profit Margin Net Profit Margin

14.7%

2003 2003

The Group principally engages in the processing, production and trading of Precious Metal Electroplating Chemicals (PME salts) in the PRC and Hong Kong

Principal Business

Principal Business

Products – 4 PME Salts

Products Used in the electroplating of:

Jewellery, watch cases and bands, spectacles frames, fashion accessories & semiconductor devices

Silver saltKAg(CN)2

Spectacles frames, writing utensils, edge card connectors and semi-conductor devices

Watch parts, electronic devices, optical instruments, chemical equipment

Rhodium sulphateRh2(SO4)3

Palladium saltPd(NH3)2Cl2

Gold saltKAu(CN)2

Jewellery, hardware and semi-conductor devices

Precious Metal Electroplating (PME) Chemicals Industry

Jewellery, genuine & imitation

Clocks and watches

Printed circuit boards (PCB)

Precious metal electroplating

chemicals

Semi-conductor

Ind

ustrial

Deco

rative

Fashion accessories, ornaments & lighting equipment

Connector

Jewellery

PCB

Watches

Applications

Palladium plated watches and bracelets

ClocksOptical Glass Fiber

Decorative Ornaments

• Zhuhai Factory, Nan Bing Technology and Industrial Park

• Products: silver salt, palladium salt and rhodium sulphate

• Area: 43,000 sq feet• Max. annual production capacity: silver salt –

160,000kg, palladium salt – 6,000 kg, rhodium sulphate – 200 kg

Production Facilities

• Hunghom Factory • Product: gold salt• Area: 10,000 sq feet• Max. annual production capacity:

7,000 kg

Hong Kong

PRC

Corporate Milestones

• Founded by Mr. Yip Kim Po • commenced trading and manufacturing of gold salts in Hong Kong

• injected into Ocean Grand Holdings Limited

• commenced establishment of Zhuhai factory

• expanded production facilities in Hong Kong

• Zhuhai factory commenced operation in January• Listed on the Hong Kong Stock Exchange on 30 June

1991

1999

2000

2002

2003

Reselling other suppliers’ PME salts to customers under own brand name

Trading

Business Models

Manufacturing

Selling PME salts produced in-house

Processing

Processing precious metal provided by customers into PME salts for the customers

Competitive Strengths

Production & delivery

system

Highentry barriers

OGC

Position in market

Dedicated management

Competitive Strengths

Pearl River Delta region – light industries highly developed

Geographical advantage of a PRC production base – proximity to end-users and electroplaters

No other large scale electroplating chemicals manufacturer in the PRC

Position in Market

Competitive Strengths

High entry barriers

OGC's strengths

• Technology know-how to ensure consistency of product quality

• Possesses well-trained and experienced technical staff

• Huge capital investment: over HK$100 million in production facilities

• Zhuhai Government took 18 months to approve the design of our Zhuhai factory. Any competitors will need to go through the same process. OGC has a first mover advantage

Barriers

Complicated productiontechnology

Capital-intensive

Strict regulations on environmental protection

Competitive Strengths

Short production cycles (~ 24 hours) enable flexible production schedule and minimization of inventories

Ability to meet urgent orders of customers

Flexible production and delivery system

Minimize inventories and capital locked up

Competitive Strengths

Experienced and dedicated management

Mr. Yip Kim Po• co-founder and chairman• over 20 years of experience in business

administration• mainly responsible for strategic planning and policy setting

Mr. Hui Ho Ming, Herbert • deputy chairman and executive director

• over 20 years of experience in securities regulations and corporate management

Mr. Yao Zongren• executive director • over 30 years of experience in chemical engineering work • responsible for overall strategic planning, policy making, business development

and overall supervision

Future Plans & Strategies

Bro

aden

p

rod

uct

sco

pePremier supplier

of top-quality electroplating

chemicals

Stren

gth

en

the m

arketing

of "K

enlap

"

Extend marketin

g and

distributio

n network

in the PRC

Enhance

value-added

services

Expand R&Dcapabilities

26

Mission

To establish Kenlap as the leading brand name

for precious metal electroplating

chemicals in the PRC

and Hong Kong