[For immediate release]
(Hong Kong, 24 September 2002) - Leading PRC software services and solutions provider, EC-Founder (Holdings) Company Limited, ("EC-Founder" or the "Group") (stock code : 618), today announced its interim results for the six months ended 30 June 2002.
FINANCIAL REVIEW
The turnover for the period ended 30 June 2002 increased by 37 % to approximately HK$ 183 million compared to last period turnover of approximately HK$133 million. The increase was mainly due to an increase in turnover of the software solutions and e-Commerce services business (the "Software business") by 98% to current period's approximately HK$ 40 million. On the other hand, the turnover of manufacture and sale of electronic products business (the "Electronic products business") which mainly related to manufacture and distribution of weighing scales also increased by 38% to current period's approximately HK$ 94 million.
The Group's gross profit increased by 41% to HK$ 32 million compared to last period. The gross profit of Software business increased by 47% to approximately HK$ 13 million and the gross profit of Electronic products business increased by 52% to approximately HK$ 19 million. Loss attributable to shareholders was about HK$33 million, with loss per share at about HK4.07 cents. The Board of Directors does not recommend the payment of an interim dividend.
During the period, the Group decided to dispose the loss making business - manufacture and distribution of semi-conductors (details of which have been disclosed in the circular to shareholders of the Company dated 29 April 2002). The total loss for the period of the disposed business amounted to approximately HK$ 20 million and this was the major reason that the net loss attributable to shareholders for current period increased to approximately HK$ 33 million.
Hence, if effect of the disposed business was excluded, the net loss attributable to shareholders for current period relating to the continuing business was approximately HK$ 13 million, which decreased by 42% from last year's loss of approximately HK$23 million. The improvement of approximately HK$ 10 million was mainly related to the Software business - increase of gross profit by approximately HK$ 4 million and cost reduction by approximately HK$ 6 million.
Following to the disposal of loss making business, the Group's liquidity and working capital position were both improved. The Group managed to improve its net cash position by approximately HK$ 4 million to HK$ 56 million as at 30 June 2002 as compared to 31 December 2001 of approximately HK$52 million. Also, the working capital ratio as at 30 June 2002 improved to 1.91 as compared to 1.49 as at 31 December 2001.
REVIEW OF OPERATIONS
The financial results of the Software business were very encouraging as the turnover in the current period was almost doubled as compared to last period. It was mainly due to the recognition by the market after last year's initial launch of products and promotion of the Company's brand name. The overall gross profit margin of Software business was approximately 31% which was higher than the more traditional Electronic products business. It is also the Company's focus to develop this higher margin business sector so as to achieve better returns.
The major business sectors of Software business are :
- Information Security 
- Geographic Information System 
- E-Finance 
- Enterprise/Government Information 
Information Security
Since March 2001 the Company launched its own developed product - Founder FireGate 
and through the sales agent network, our clients have reached nationally in the PRC and in particular, it was well accepted by the Chinese Government and the People's Bank of China 
. During the first half of year 2002, the Company has completed exhibition shows in more than 50 cities including : Beijing, Shanghai, Guangzhou and Chongqing to promote the Founder FireGate products and the Company's brand name.
Geographic Information System
The Company remains as the major distributor for Mapinfo products in the PRC. The product is mainly focused to provide information to the management in the area of location based intelligence which combines management and financial data with spatial information.
Supported by a strong technical team of engineers, the Company has completed various projects for a large clientele. Such major industries includes:
- oil & petroleum & resources
- telecommunication service provider
- radio broadcast station
- logistic intelligence and management chain enterprise
- government forest management bureau 
- historical relic bureau 
E-Finance
The Company completed the project of "Key Client Service System" 
for the China Construction Bank 
as scheduled and it was well accepted by the client. Such system was commented as the leading electronic banking system in one of the most important exhibition show among the financial institution industry - "China International Finance Product Exhibition" 
which was held in May 2002.
Enterprise/Government Information
The Company completed various projects for enterprises and government and in particular, the construction of 2008 Olympia Bidding Website 
. Following to the successful bidding to host the 2008 Olympia Games in Beijing, the new website renamed as "29th Olympia Organisation Committee Website" 
was established and in operation as scheduled.
FUTURE PROSPECTS
Following to the business restructure of disposing the electronic components business, the Company will concentrate and utilise its resources to further develop its Software business.
The Company's research and development team has developed two new major products in the Information Security sector:
- Intrusion Detect System 
- Security Evaluation System 
The Intrusion Detect System is a tool which enables the network manager to detect the attack by hackers into an enterprise's system. By gathering a large pool of information from the operating system, this tool can analyse and detect the trace of intrusion attack and acknowledge the security system.
The Security Evaluation System is a tool which can give an advance warning to the network manager about the security gap by studying and evaluating the current enterprise system environment.
Recently, these two products are both certified as approved security products by the relevant PRC Information Security Testing Centre and therefore it proved the Company's ability and professional status to deliver very high standard of information security products.
Also, various new major contracts has been signed such as:
- with National Broadcast Bureau 
to develop a monitoring system for cable broadcast signals
- with China Construction Bank to develop fund approval system project
- with Oil & Petroleum companies to develop management information system
- with Beijing Tax Bureau to develop individual income tax management system
Leveraging with present business sectors structure and strong technological knowledge and experience, the Company will enhance cross products selling and provision of services and solution to our customers. In particular, the Company will continue to focus on industries such as telecommunication, oil & petroleum & resources, banking and the Government sector.
CONCLUSION
With our experienced technical staff, extensive sales network and united management team, we believe that our persistence to provide full customer satisfaction and deliver top quality products can have a fruitful result in the coming future.
About EC-Founder (Holdings) Company Limited
EC-Founder is an Internet software technology, solutions and services provider in the PRC. The Company's business covers four major areas - information securities products and solutions, geographic information systems, e-finance and enterprise/government information platforms. The Company is committed to providing high quality, customer-oriented and technology-led services and solutions.
For press enquiries:
EC-Founder (Holdings) Company Limited
Mr. Terry Ho - Group Financial Controller
Tel: 2989 1200 / 2437 8010
Fax: 2437 9393
Email: terryho@ecfounder.com.hk
UNAUDITED CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT
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