Wisdom Industrial to Reap Handsome Profits from Operations in China

Taipei, Oct. 20, 2005 (CENS)--Wisdom Industrial Co., Taiwan's leading cloth manufacturer, is expected to rake in approximately NT$100 million (US$2.94 million at US$1 = NT$34) in profits this year because a reinvestment in a chemical fiber plant in mainland China is expected to double earnings.

Wisdom's chemical fiber plant is predicted to gain 15 million renminbi (RMB, or Chinese yuan, about US$1.8 million) in profits for 2005, approximately double the amount in 2004. However, China Dragon Textile (Hui Zhou) Co., Wisdom's sister company in the mainland, is very likely to witness a decline in profits this year, to about five million renminbi (US$6.1 million). Both Wisdom and China Dragon are affiliates of Grand Holdings Co., a wholly independent Taiwanese firm in China.

Chen Chien-chu, president of Wisdom, indicated that the company's plant in Taiwan scored about NT$35 million (US$1.03 million) in profits in the first three quarters of the year, and that the profits for the fourth quarter are estimated to be fruitful since the orders placed with the company look stable for the last three months of the year. With the added boost of the sizable profits from its operations in the mainland, Wisdom's earnings may break the NT$100 million (US$2.94 million) mark this year.

Taiwan's other textile makers have also experienced thriving business this year. Honmyue Enterprise Co., Taiwan's leading manufacturer of industrial-use cloth, has recently broken ground for an integrated textile and dyeing plant in mainland China. The plant is projected to install 500 weaving machines, which are expected to fabricate 7.5 million yards of cloth per month. The construction of the plant is slated for completion next year, and its annual production value is estimated to amount to NT$2.2 billion (US$64.71 million).

Taiwan's other garment makers, including Makalot Industrial Co., Tainan Enterprises Co., and Eclat Textile Co., also experienced good earnings in the first nine months of the year.

In the third quarter, Makalot witnessed average monthly revenues of around NT$1 billion (US$29.41 million), and hit a new monthly high revenue of NT$1.2 billion (US$35.29 million) in August alone. For the same quarter, the company may rake in NT$270 million (US$7.94 million) in profits, or earnings per share (EPS) of NT$2.2 (US$0.065). In the first three quarters, Makalot's pretax EPS may expand to NT$5 (US$0.15).

Currently Makalot is fully booked with orders for the last quarter, with expected shipments of 1.4-1.5 million dozens of garments, double the corresponding figure of last year. With strong market demand, the company may see its revenue reach NT$10 billion (US$294.12 million) for the full year.

Thanks to growing shipments from its plants in Cambodia and Jordan, Tainan Enterprises scored NT$52 million (US$1.53 million) in pretax profits in September, a whopping rise of 65.26% over the same month of last year. In the first nine months, the company's pretax profits accumulated to NT$433 million (US$12.74 million) for an EPS of NT$3.46 (US$0.1).

Eclat, a leading cloth maker and garment manufacturer in Taiwan, has also seen brisk business recently. For the first three quarters of this year, the company is expected to record a pretax EPS of NT$2.5 (US$0.074). To meet growing market demand, the company is now expanding its operations in Cambodia, and its revenue for the fourth quarter may hit a record high.