[For Immediate Release]
(Hong Kong, 18 September 2001) - Leading PRC software services and solutions provider, EC-Founder (Holdings) Limited, ("EC-Founder" or the "Group") (stock code: 618), today announced its interim results for the six months ended 30 June 2001.
For the period under review, EC-Founder recorded a turnover of approximately HK$134 million, representing a 12% increase as compared to the corresponding period last year. Gross profit was approximately HK$22.8 million, a rise of 136% as compared to the corresponding period last year. Loss attributable to shareholders recorded approximately HK$22 million while loss per share was HK2.69 cents. The Board of Directors does not recommend the payment of an interim dividend.
Mr Ricky Lei, President of EC-Founder, said, "I am pleased to report that our software solutions and services business has grown very rapidly since commencing operations in September 2000. This new business has brought in an increase in turnover and a much higher jump in gross profit. In view of the strong team consisting of approximately 280 technical and sales professionals, we expect our software business to expand rapidly. With the popularity of commercialized internet applications across all industries, we believe that our new role as an e-Commerce Enabler will greatly enhance our performance and maximize returns for our shareholders."
The provision of software solutions and services contributed approximately 15% of the Group's total turnover, amounting to approximately HK$20.3 million. The remaining 85% of the Group's total turnover was derived from the manufacture and sale of electronic products and components.
EC-Founder currently provides software services and solutions in four major areas. Location-based Business Intelligence contributed about 42% to the total turnover generated from the software business. The remaining 58% was derived from Network Security Products and Solutions, e-Finance Solutions and Enterprise Information Solutions.
In the area of Network Security Products and Solutions, EC-Founder developed and patented FireGate in March 2001, the first product to obtain the highest level of firewall testing certification from the PRC Ministry of Public Security, Military Bureau, Ministry of State Security and State Secrecy Bureau. With the use of FireGate, the official website for the Beijing 2008 Olympic Games Bid Committee was successfully safeguarded from over 15,000 overseas hacker attacks during the peak period. In addition to FireGate, EC-Founder also successfully developed iTornado, the first complex network simulation testing environment in China in May 2001.
"According to the IDC report, the world market value for security products is forecasted to be approximately US$14 billion in 2005 with an annual growth rate of approximately 23%. Asia Pacific's share of the world market is predicted to increase from 12% in 2000 to 17% in 2005 which amounts to approximately US$2.4 billion. In view of this large market potential, apart from our current FireGate product, we are planning to develop intrusive detection system products, Virtual Private Network (VPN) and anti-virus products in the coming year," said Mr Lei.
There is a huge potential need for location-based business intelligence for industries such as oil, transportation, consumer products, distribution, telecommunications, military and government. EC-Founder successfully launched its own Founder Mirage v5.0 products in March 2001 and has exclusive distributorship in the Greater China region for the Geographic Information System (GIS) product, MapInfo products. Currently, EC-Founder has secured clients in various industries such as Industrial & Commercial Bank of China, RAE, SINOPEC and PetroChina.
The Group successfully obtained contracts from China Construction Bank for the setting up of a B2B clearing platform. High demand for e-Finance platforms has arisen from the banks' large clients, which include investment securities companies, petroleum companies and various national enterprises.
As for Enterprise Information Solutions, the Group has developed Enterprise Application Portal (EAP) solutions for enterprises such as Wan Tong Property Development and Cartex Petrol. In addition, Government Application Portal (GAP) solutions are available for government departments, for example, the construction of the Beijing Administration for Industry and Commerce (BAIC) online working platform and various government community and social security projects.
In June 2001, EC-Founder's self-developed software products, Founder Mirage, FireGate, e-Finance, EAP, Web Manager and intelligent logistics system won a total of 2 Gold and 4 Honorary awards for their excellence and creativity in the 4th China International Software Exhibition and Symposium.
"Beijing's hosting of the 2008 Olympic Games will bring us substantial opportunities for the Location-Based Intelligence Business and will help Beijing's development into a digital city, especially in city planning, transportation and asset management and environmental development. At the same time, leveraging our experience in the construction of the Official Website for the Bidding Committee, we are well positioned to capture the opportunity to construct and operate the new 2008 Olympic Games official website," said Mr Lei.
Mr Lei concluded, "Looking forward, the rapid rise of information technology applications across the world fosters tremendous opportunities for the growth of solutions providers like EC-Founder. Our deep-rooted understanding of Chinese business environment, coupled with our strong R&D capability and solid customer base, provide us with total confidence in EC-Founder's future prospects. And we aim to become the top software solutions and service provider in the Internet Era."
About EC-Founder (Holdings) Company Limited
EC-Founder is principally engaged in the provision of software services and solutions in four areas - Network Security Products and Solutions, Location-based Business Intelligence, e-Finance Solutions and Enterprise Information Solutions. The Group is committed to providing top quality, customer-oriented and technologically-driven services and solutions.
For press enquiries:
Strategic Financial Relations (China) Limited
Ms. Anita Cheung / Ms. Flora Ng / Ms. Cynthia Ng / Ms. Karen Chen
Tel : 2864 4827 / 2864 4837 / 2864 4894 / 2864 4850
Fax : 2527 1271 / 2804 2789
Email : anita@strategic.com.hk / flora@strategic.com.hk / cynthia@strategic.com.hk / karen@strategic.com.hk
UNAUDITED CONSOLIDATED INTERIM RESULTS
The Board of Directors (the "Directors") of EC-Founder (Holdings) Company Limited (the "Company") announces the unaudited condensed consolidated interim financial statements of the Company and its subsidiaries (collectively the "Group") for the six months ended 30 June 2001. The condensed consolidated interim financial statements are unaudited, but have been reviewed by the Company's audit committee.
UNAUDITED CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months
ended 30 June
2001 2000
(Unaudited) (Unaudited)
HK$'000 HK$'000
TURNOVER 133,580 118,930
Cost of sales (110,732) (109,247)
_______ _______
Gross profit 22,848 9,683
Other revenue 15,314 1,487
Selling expenses (22,242) (2,339)
Administrative expenses (35,683) (16,391)
Other operating expenses (1,299) -
_______ _______
LOSS FROM OPERATING ACTIVITIES (21,062) (7,560)
Finance costs (4,289) (3,401)
Share of profits less losses of:
Jointly-controlled entities - 8,047
Associates 2,974 -
_______ _______
LOSS BEFORE TAX (22,377) (2,914)
Tax (871) (1,900)
_______ _______
LOSS BEFORE MINORITY INTERESTS (23,248) (4,814)
Minority interests 1,208 1
_______ _______
NET LOSS FROM ORDINARY ACTIVITIES
ATTRIBUTABLE TO SHAREHOLDERS (22,040) (4,813)
========== ==========
LOSS PER SHARE
Basic (2.69 cents) (2.69 cents)
========== ==========
Diluted N/A N/A
========== ==========
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