VANCOUVER, CANADA -- October 6, 2004 -- Nam Tai Electronics, Inc. (“Nam Tai” or the “Company”) (NYSE Symbol: NTE; CBOE Symbol: QNA; Frankfurt Stock Exchange Symbol: 884852) is pleased to announce that its revenue for the 3rd Quarter is expected to approach its upper forecast of $140 Million. Details of 3rd Quarter earnings will be announced after the close of market on October 29th, 2004 and the Company will hold a conference call on Monday, November 1st, 2004 at 10:00 a.m. Eastern Time to enable discussion of the results with management. The Company would also like to remind investors that the 3rd Quarter dividend of 12 cents will be paid on October 21st, 2004 for shareholders who appear on the Record on September 30th, 2004.
Nam Tai would also like to update investors with respect to the Company’s investment in the TCL Group of Companies. Nam Tai owns 9% of TCL Communication Technology Holdings Limited (“TCL Com.”) and Nam Tai’s subsidiary, Nam Tai Electronic (Shenzhen) Limited (“NTSZ”) owns 3.69% of TCL Corporation (“TCL Corp.”). TCL Com. is listed on The Hong Kong Stock Exchange, whereas TCL Corp. is an “A” share listed on The Shenzhen Stock Exchange in China.
The share price of TCL Corp. and TCL Com. have not performed in line with original expectations. The “A” share market in China has been severely affected by the macro economic policies recently implemented by the PRC Government to control the growth of the heated economy. Such policies have had an adverse impact on market sentiment towards PRC related companies, particularly companies listed on the “A” share market in China and PRC related companies listed on The Hong Kong Stock Exchange. It was mainly on account of weak market conditions that the listing of TCL Com. on the Hong Kong Stock Exchange was by way of introduction. As a result, there was no underwriter appointed, no new shares issued, no issue price, and hence relatively low investor interest to the listing.
Despite the issues mentioned above, Nam Tai is optimistic towards the future prospects of the TCL Group of Companies, and believes that the current share price of both TCL Com. and TCL Corp. is not a clear reflection of their true value.
TCL Com.’s joint venture with French mobile phone manufacturer Alcatel should provide it with opportunities for future domestic and overseas business expansion, bringing about strong revenue growth for the company. Similarly, the joint venture between one of TCL Corp.’s subsidiaries and French TV manufacturer Thomson has created the world’s largest TV maker by output, with opportunities for future growth.
It is Nam Tai’s intention to maintain our holding in TCL Com. and TCL Corp. until such time that the liquidation of the shares will bring about an appropriate investment return for our shareholders.
In the meantime, Nam Tai will classify our holdings in TCL Com. and TCL Corp. in our Balance Sheet as Marketable Securities, and will value them at the end of every quarter. For TCL Com., the closing share price at quarter end will be used to calculate the market value of our holding. For TCL Corp., the Company will take into account the recommendation of an independent financial adviser to value the shares at a significant discount to quarter end share price, as the shares held by NTSZ are founder shares that have a restriction on their sale prior to April 2005.
Pursuant to US GAAP, this exercise will not have an impact on Nam Tai’s Profit & Loss Account until the TCL shares are sold. However, the shareholders equity will fluctuate each quarter based on the closing price of TCL Com. and TCL Corp. at the end of each quarter.
Nam Tai’s management believes our approach in dealing with the TCL Group shareholdings is prudent and will enhance our corporate transparency.
About Nam Tai Electronics, Inc.
We are an electronics manufacturing and design services provider to original equipment manufacturers of telecommunications and consumer electronic products. Through our electronics manufacturing services operations, we manufacture electronic components and subassemblies, including LCD panels, LCD modules, radio frequency modules, flexible printed circuit sub-assemblies and image sensors. These components are used in numerous electronic products, including cellular phones, laptop computers, digital cameras, copiers, fax machines, electronic toys, handheld video game devices and microwave ovens. We also manufacture finished products, including cellular phones, palm-sized PCs, personal digital assistants, electronic dictionaries, calculators and digital camera accessories for use with cellular phones.
Nam Tai has two Hong Kong listed subsidiaries, Nam Tai Electronic & Electrical Products Limited ("NTEEP") and J.I.C. Technology Company Limited ("JIC"). Interested investors may go to the website of the Hong Kong Stock Exchange at www.hkse.com to obtain the information. The stock code of NTEEP and JIC in the Hong Kong Stock Exchange are the 2633 and 987 respectively. Investors are reminded to exercise caution when assessing such information and not to deal with the shares of the Company based solely on reliance of such information. The results of NTEEP and JIC only represent a part of the results of the Company and there are GAAP differences in the financial statements of NTEEP and JIC, when compared with the financial statements of the Company. Furthermore, different subsidiaries of the Company may have different peak season during a year.