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Press Release CEC Announces 2007/08 Annual Results * * * * Turnover from Core Electronic Component Manufacturing Business Reached HK$787,634,000 (Hong Kong, 15 August 2008) -- CEC International Holdings Limited ("CEC") and its subsidiaries (collectively the "Group") (Stock Code: 759), a manufacturer of electronic components such as coils, transformers, etc., today announced its annual results for the year ended 30 April 2008. The Group recorded a turnover of HK$788,727,000, a 12.6% increase relative to last year (2007: HK$ 700,279,000). Gross profit increased by 4.8% to HK$142,340,000. The Group's gross profit margin, however, had a drop to 18.0% (2007:19.4%) as a result of increased production costs from rising raw material, labour and energy costs, and the appreciation of RMB, and profit attributable to shareholders also dropped a slight 0.9% to HK$23,601,000 (2007: HK$23,810,000). Despite that, the Group recorded increase in net cash inflow from operating and financing activities, speaking to its ability to generate cash inflow and its strong financial position. Basic earnings per share for the year ended 30 April 2008 were HK3.29 cents (2007: HK3.32 cents). The Board of Directors recommended the payment of a final dividend of HK0.50 cent per share (2007: HK0.95 cent) for the year ended 30 April 2008. Mr. Coils Lam, Chairman of CEC, said, "The past financial year was ridden with challenges for most of the manufacturers with production bases in China. The adverse operating environment brought immense pressure on us. Despite the difficult operating environment, by continuing to focus on its core electronic component manufacturing business, pushing on with enhancing production efficiency and its production lines, and maintaining relationship with long-standing customers, the Group was able to grow its turnover for the year." During the year under review, turnover of electronic components manufacturing business, the Group's core business, reached HK$787,634,000, up 12.7% as compared to HK$699,038,000 last year, accounting for 99.9% (2007: 99.8%) of the Group total. The increase was attributable to satisfactory growth of various consumer electronics segments particularly cell phone, flat-panel television, computer, electronic video game console and power-supply devices. Page 1 of 3 Along with the booming Mainland China economy, the problem of tight labour supply comes, which often gets yet tighter during festivals when employee turnover is high and recruitment is difficult. Furthermore, the average wage levels of different types of workers have been rising with inflation. Heeding this trend, the Group revealed staff remunerations and made appropriate adjustments during the year and that led to an increase in overall staff cost. To improve its production cost structure, the Group has been directin