CEC International Holdings Limited

[For immediate release]

[January 18, 2000, Hong Kong] - CEC International Holdings Limited ("CEC" or the "Group"; stock code: 759) announced today that the Group, will invest into a project to purchase machinery and equipment from various suppliers for the production of ferrite cores-manganese zinc series in the PRC by February 2000. The estimated total purchase investment is HK$48 million, and will be financed by internal resources and long-term bank borrowing. The project is expected to be in operation by mid June to end of July 2000.

The investment decision has been made based on careful consideration. The project is coherent with the R & D of line filters and switching power transformers, broadening the product range.

Chairman of the Group, Mr. Lam Wai Chun said, "The Group is confident that the investment will bring about long term benefits and achieving its business objectives, with the Group's extensive experience of over 20 years in the industry. Based on the assumptions made calculated from the Group's performance, the Group is expecting a gross profit margin ranging between 30 to 35%, an impressive estimate for a brand new project."

Taking into account the proportion of the Group's share in the market, with the consideration worth as much as HK$50million, the Group is confident that it will still be able to benefit from the investment and lay down the foundations for further expansion in the near future, as it rest assured against the growing market potential and low risk high profit nature of the plan. The Group is looking forward to continue its strive following the principles of prudent financial and investment management, in order to yield optimum benefits from any business opportunities due to emerge.

Ferrite cores-manganese zinc series are the required material of the Company's products, such as line filters and switching power transformers, which are extensively used in the manufacture of computers, telecommunication equipment and household electrical appliances. The Directors are convinced that through investing into the project, the Group will be able to broaden the product range and the customer base for the Company and its subsidiary. It is envisaged that the project will increase the Group's turnover and generate a positive contribution to the Group in the future.

Mr. Lam concluded, 'Gradually moving away from the traditional mode of coil production, the Group is increasingly adopting automated production, as part of the long-term plan to downsize the required labour and shorten the necessary production time. The Group's production facility for radio frequency coils and intermediate frequency coils are in operation since the end of December 1999. The investment is approximately HK$9,000,000. The Group has also planned to invest into an automated production facility for toroidal coils and choke coils, scheduled to be operational by mid 2000. The estimated investment is approximately HK$7,000,000. Additional automated production facilities for the production of high quality radial type choke coils has been scheduled for operation by mid 2000, to cater for the demand of the Group's customers making telecommunication, electrical, and audio-visual equipment. The estimated investment is approximately HK$9,000,000."

"The Group expects a corporate direction towards automated production will substantially improve upon management control and the Group's production efficiency, strengthening the Group's basis for business development."

Corporate Information:
CEC is a reputable coil manufacturer, engaged in the design, development, manufacture and sales of a wide range of coils. CEC coils can be commonly found in IT products, telecommunication products, home appliances and audio-visual products, etc. Accredited by the recognition of ISO 9001 in 1995, the Company has more than 400 engineers and quality control staff for the assurance of product quality. CEC has been a listed company on The Stock Exchange of Hong Kong Limited since November 1999.

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