Phihong to complete three merger plans by year-end

Taipei, June 11, 2003 (CENS)--Phihong Enterprise Co., Ltd. Of Taiwan recently said that it expects to complete three international merger plans by the end of the year to pave its entry into new business segments.

Phihong, a leading manufacturer of power supplies for personal electronic devices, is planning to acquire three companies, including makers of electronic ballasts and long-efficiency (hi-power) rechargeable batteries, and an electronics manufacturing services (EMS) provider.

On June 9, Phihong shareholders authorized the company to issue global depository receipts (GDRs) to pay for the acquisitions.

Phihong chairman Lin Chung-ming stressed that his company would still concentrate on its core power supply business after the mergers, but it will also into new related businesses. Lin claimed that his company spent three years evaluating the feasibility of making electronic ballasts and plans to set up a production facility in Shanghai, mainland China, which is scheduled to begin mass production in the second half this year.

Lin said that electronic ballasts and long-efficiency batteries command high profit margins. He noted that Phihong will have a chance to supply ballasts to major lamp makers in the U.S. The new battery business will be the major business focus of the company's branch office in New York.

Lin claimed that his company is in intensive talks with the three merger targets, which are located in Europe, America and mainland China. The chairman said that his company plans to issue a US$60 million worth of GDRs to pay for the acquisitions.

Phihong said that its May operations were affected by SARS (severe acute respiratory syndrome) in May but have recovered to previous levels in June.

Lin said that Phihong has won orders from two leading cell phone makers in South Korea, reducing the company's dependence on orders Motorola, which currently accounts for 55% of Phihong's business compared with 60% in 2001. Lin claimed that his company is now a supplier to three of the top-five cell phone makers in the world.

Phihong had revenue of NT$7.4 billion (US$213.26 million at US$1:NT$34.7) last year, up 7.9% from the previous year, and posted a pre-tax profit of NT$645 million (US$18.59 million) down 19.05% from 2001. The company registered an after-tax profit of NT$550 million (US$15.85 million) last year, generating NT$2.28 (US$0.07) per share before taxes.

Phihong has set a revenue goal of NT$8.5 billion (US$244.96 million) for this year, up 14.92% from last year. It expects pre-tax profits to rise to NT$349 million (US$10.06 million) this year.

Phihong is also a leading supplier of accessories to personal electronic devices, including cradles, hands-free headsets, interface cables and other accessories. The company currently has engineering and manufacturing facilities in North and South America, Taiwan and mainland China.