Laminates manufacturer Kingboard Chemical Holdings aims to spend HK$600 million this year expanding mainland production capacity to capitalise on growing demand from the improving global electronics industry.
The target was revealed after the company announced a net profit of HK$301.28 million for the nine months to December.
This compared with net profit of HK$338.95 million for the full year to March last year. Kingboard has changed its year-end date from March 31 to December 31. The company's shares rose 9.85 per cent to HK$7.25 after it raised its dividend payout by an annualised 16 per cent. Kingboard proposed a final dividend of six HK cents, bringing its total dividend payout to 10 HK cents for the nine-month period.
Director Chadwick Mok Cham-hung said monthly production capacity at the company's new paper laminate plant, completed last December, would double to 2,600 tonnes this year.
Meanwhile, production capacity at an enlarged printed circuit board plant would increase 30 per cent.
The company had committed about HK$150 million to its mainland expansion, he said, and the remaining HK$450 million capital expenditure would depend on global economic developments. He said the company, which operates more than 20 plants on the mainland, had cash flow of HK$400 million. Its gearing ratio would jump to 68 per cent, from 48 per cent, if a subsidiary completed the purchase of a power plant in Guangdong for 700 million yuan (about HK$657.16 million), Mr Mok said.