Carpenter Tan Announces Encouraging Interim Results for 2010

    HONG KONG, Aug. 30 /PRNewswire-Asia/ --



             Financial Highlights (For the six months ended 30 June)
                                            2010          2009        Change
                                        (RMB'000)     (RMB'000)           (%)

    Turnover                              85,919        65,217        + 31.7
    Gross Profit                          55,152        38,409        + 43.6
    Profit before tax                     38,402        26,645        + 44.1
    Profit attributable to
     owners of the Company                29,224        21,327        + 37.0
    Basic earnings per share
     (RMB cents)                            11.7          11.4         + 2.6

Carpenter Tan Holdings Limited ("Carpenter Tan" and its subsidiaries, collectively the "Group", HKEx stock code: 837), the renowned manufacturer, distributor and retailer of small wooden accessories with traditional Chinese cultural features, announced its interim results for the six months ended 30 June 2010 (the "period under review").

Benefited from the improvement of business environment, the Group expanded its business and hence achieved satisfactory results. Turnover increased by 31.7% to RMB85,919,000 compared to the corresponding period of last year. Gross profit reached RMB55,152,000 with an increase of 43.6%; while gross profit margin increased from 58.9% to 64.2%. Profit before tax reached RMB38,402,000, representing an increase of 44.1%. Profit attributable to owners of the Company surged 37.0% to RMB29,224,000. Basic earnings per share are RMB11.7 cents.

Mr. Tan Chuan Hua, Chairman and Chief Executive Officer of Carpenter Tan said, "During the first half of 2010, the Chinese economy recovered from the global financial crisis and gained its development momentum. With the rising consumer purchasing power, the environment of the retail industry has improved. Revenue growth was attributable to the exertion of the Group's enhanced competitiveness by grasping opportunities in the recovery of the China economy. The expansion of the Group's wooden accessories retail business led to an increase in the number of franchise shops and purchase of products. As a result, franchise fee income of RMB565,000 was received during the period under review, and achieved to an outstanding operating results."

The Group has developed an extensive distribution network by operating the franchise programme in the PRC and abroad. As at 30 June 2010, the Group had 953 franchise shops in the PRC, representing an increase of 161 shops as compared with the corresponding period last year, with extensive geographical coverage of PRC. The Group had three franchise shops in Singapore, one franchise shop in Korea and one franchise shop the United States. The Group has also established four overseas self-operated retail shops under the name of Carpenter Tan in Hong Kong.

During the period under review, the Group established a number of demo shops in the central business districts of China's first tier cities. 21 demo shops were established by the Group's franchisees and the number is expected to increase to approximately 40 this year. In addition, the Group continued the operation of Carpenter Tan home accessories shops and Carpenter Tan handicraft stores.

In addition, the Group further explored the overseas market and successfully developed 8 new customers in Canada, Italy and Australia. It has also planned to open new stores in Thailand, Malaysia and Saudi Arabia to consolidate the Group's position and coverage in international market, with an aim to enhance the presence in the international market.

The Group strives to provide consumer various choices by introducing new products. During the period under review, 567 types of products have been successfully developed, among which 71 types of products has been launched in the market, comprising hangers, gift boxes, mirrors and accessories. The Group's production capacity also increased in order to keep pace with market demand. The output of combs increased to 1,961,000 from 1,507,000 units compared to the corresponding period in last year. The output of mirrors and other products has been increase from 171,000 units to 281,000 units.

During the period under review, the Group also launched marketing campaigns in various media, including the advertisements at the demo shops throughout China and the online promotion activities, to promote the awareness of the Carpenter Tan brand.

Looking forward to the second half of 2010, the Group will continue to develop by grasping the opportunities brought by the strong economic growth in China. The Group plans to upgrade approximately 40 shops in major cities like Beijing, Shanghai, and Guangzhou, etc. It will also establish flagship stores in first-tier cities in order to enhance brand penetration in local consumer market. In addition, the Group will further expand into overseas markets and enlarge the overseas customer bases in Europe and the United States. The Group also intends to open shops in the Southeast Asia and Middle East markets.

"As mainland China's domestic economy continues to develop rapidly, the Group is confident of its ability to benefit from the positive effects of upwardly rising trends in retail consumption. To this end, The Group is now poised to explore a wider range of development opportunities to build 'Carpenter Tan' into a leading international wooden accessories products brand while bringing in extraordinary returns for investors," Mr. Tan concluded.

    Turnover analysis by products

                                      Six months ended 30 June
                                      2010                       2009
                             (RMB'000)          %       (RMB'000)          %

    Sales
     - Combs                   28,041        32.6         25,308        38.8
     - Mirrors                  1,233         1.4          1,137         1.8
     - Box sets                51,316        59.8         34,369        52.7
     - Other accessories*       4,764         5.5          3,665         5.6
    Franchise fee income          565         0.7            738         1.1
    Total                      85,919       100.0         65,217       100.0

    * Other accessories include small home accessories as well as furniture.

About Carpenter Tan

Carpenter Tan is primarily engaged in the design, manufacture and distribution of small wooden accessories reflecting traditional Chinese cultural features, and also developed its own franchised network of shop outlets. The Group's products fall into four major categories: (1) combs made of wood or horns, (2) pocket-sized wooden mirrors, (3) accessories and adornments, (4) box sets. Over 2,000 products sold under the name "Carpenter Tan" have been launched onto the market. Carpenter Tan also had 953 franchise shops widely dispersed across the PRC. In addition, there are five franchise shops each in Singapore and Malaysia and one franchise shop each in the United States and Korea. The Group also oversees four self-operated retail shops under the name of "Carpenter Tan" in Hong Kong. The Group was successively named by Forbes China as one of the Top Highest Growth Potential Enterprises from 2006 to 2009.

    For further information, please contact:

    Porda International (Financial) PR Group
     Ms. Keely Chan
     Tel:  +852 3150 6760
     Email: [email protected]

     Ms. Kelly Fung
     Tel:  +852 3150-6763
     Email: [email protected]

     Ms. Fiona Ko
     Tel:  +852 3150-6750
     Email: [email protected]

     Ms. Kiki Zhang
     Tel:  +852-3150-6775
     Email: [email protected]

     Fax:  +852-3150-6728

SOURCE Carpenter Tan Holdings Limited