Sinomem Technology Continues Sparkling Performance With 47% Increase In Net Attributable Profit To $6.1 Million

Aug 25, 2003

Sinomem Technology continues sparkling performance with 47% increase in net attributable profit to $6.1 million

Financial Highlights	6 months ended 30/06/2003	6 months ended 30/06/2002	% Increase
Revenue ($'000)	17,644	12,383	42
Gross Profit ($'000)	8,914	4,932	81
Profit Before Tax ($'000)	6,617	4,434	49
Net Attributable Profit ($'000)	6,057	4,126	47

Sinomem Technology Limited ("Sinomem"), an advanced membrane technology specialist, today reported a 47% increase in net attributable profit to $6.1 million for the six months ended 30 June 2003.

With almost all of its operations located in the People's Republic of China ("PRC"), Sinomem achieved a 42% increase in revenue to $17.6 million and a 81% surge in gross profit to $8.9 million. For the first half of 2003, more contracts were delivered as compared to the same period last year. A breakdown of revenue by customers' industry indicated that 90% of the revenue was from the pharmaceutical industry, up from 80% in the previous period. Customers from other industries including chemical and dyestuff, food and beverages, and water and wastewater treatment, contributed to the remaining revenue.

"Despite the economic uncertainty, we are pleased to achieve such levels of profitability. The SARS outbreak has raised the demand for health care products. As a result, our customers in the pharmaceutical industry experienced an increasing demand for their products. As they expand their production, we have seen increased orders for additional membrane processing systems as well as for replacements and maintenance," commented Dr Lan Wei Guang, Managing Director of Sinomem.
Earnings per share for the six months ended 30 June 2003 grew 42.8% to 1.97 cents from 1.38 cents for the six months ended 30 June 2002. Net tangible assets per share as at 30 June 2003 was 13.45 cents.

To support its operations, Sinomem continue to invest in research and development. Sinomem has developed sophisticated membrane solutions for highly specialised industries that involves considerable scientific, technological and engineering expertise, which caters to the needs of the pharmaceutical industry. Sinomem plans to expand its operations in the PRC by diversifying the applications of its advanced membrane technology through targeting other industries such as petrochemicals, pulp and paper, and traditional Chinese medicines. There are also plans to raise Sinomem's corporate profile outside the PRC by establishing a sales and logistics centre in Singapore, so that the Group will be better positioned to penetrate and tap into the Singapore and Southeast Asian markets.

Sinomem intends to manufacture certain components, which are currently purchased from external suppliers, to reduce the costs of production and hence enhance its competitive edge. Part of the IPO proceeds will be used to acquire and install new equipment and machinery for these new production facilities. The production facilities are expected to be operational in the last quarter of 2003.