LAMINATES manufacturer Nam Hing Holdings will continue to enjoy high earnings growth from a burgeoning electronics sector. Most electrical and electronic products use printed circuit boards as their internal foundation. These boards are made from laminates, which are the backbone of the electronics industry. Because domestically produced laminates can be made at lower cost than imported Taiwanese products, Nam Hing and its local competitors have been able to undercut Taiwanese imports. Nam Hing's laminate products are technically equivalent and it has experienced strongly growing demand for its products. The company's response has been to expand its China and Thailand production facilities with the result that some substantial manufacturing cost savings have been achieved over its older Hong Kong-based factory operations. Nam Hing's capacity expansion, while primarily driven by local printed circuit board makers switching from Taiwanese products, has also come from organic growth from the migration of much of the world's electronics and electrical manufacturing industry into southern China. As a result of the company's transfer of some of its laminate manufacturing operations into China, specifically to its Zhongshan factory last year, the company has seen a reduction in its manufacturing cost base. Profit margins have accordingly risen. Gross margins were about 20.75 per cent in 1993 but rose to about 23.68 per cent last year. This upward trend can also be seen at the net level from the company's most recent interim figures, where for the six months to September 1994 a net margin of 15.1 per cent was reported, compared with 13.7 per cent for the same period in 1993. Cost reductions in China are estimated to have saved the company an amount equivalent to between one and two per cent of its gross margins, while the manufacture of some of its copper foil needs in Bangkok are expected to contribute a further one per cent cost saving this year.