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SCMP Reporter

GRANDE Holdings this week will be unveiling products that it believes will shape its future.

Last week, the company shed some personalities that had forged its past.

But for the ebullient executive director, Albert Ha, it is simply business as usual.

Not so, say the firm's critics, who believe the company is undertaking some image building by distancing itself from some of its controversial associates.

A flurry of boardroom activity saw its chairman and casino tycoon, Stanley Ho, and two of his lieutenants from Shun Tak Holdings, corporate secretary Ambrose So and director Patrick Huen resign.

The announcement came the day after Grande reported a 47.5 per cent rise in attributable profits to $118 million for the six months to June 30.

Mr Ha said the resignations were a vote of confidence by a leading shareholder in its handling of the company.

''This will have absolutely no effect on the company. In the old days, Stanley Ho was sitting on the board as a major shareholder. Later he sent two assistants to represent his interests and look at the operation of the company.

 ''Five years on and we have proved to them we are a going concern. Mr Ho can better spend his time playing golf or doing other things. They are fully content in the way we are running the company and are busy in their own capacities.'' Christopher Ho, group chief executive, would ensure there would be no change in direction, Mr Ha said.

 ''He has managed the company from day one. It is still the case. There will be no change in emphasis.''  The company's high-technology manufacturing base spreads from Italy to Taiwan and it has ambitions to maintain the momentum.

In last week's results announcements, each of the group's core businesses - magnetic heads for computers, consumer electronics and computer monitors and televisions - contributed to the growth.

 Mr Ha said: ''This has been done through a process of generic growth, acquisition and sales of assets to generate exceptional gains.

''We own quite a number of patents and most of our products are designed, developed and sold to clients who put their name on it.'' The company employs about 270 engineers and scientist at its plants in the United States, Taiwan, Kong Kong and Milan.

 ''We have well-defined strategies which include a commitment to new products and capital investment. We can make products competitive and make use of lower-cost labour in China, Taiwan and Malaysia.

''We can also balance the international situation. We anticipated there would be anti-dumping laws introduced in Europe and bought a television manufacturing factory in Italy.''  Mr Christopher Ho said the company made an exceptional gain of $96 million from the flotations and sales of shares in subsidiaries in its finals for the year ending December 31.

 He expected to see continued exceptional gains from asset sales contributions to its overall profits this year and next.

 Capetronic International Holdings, which manufactures computer monitors and television sets, reported attributable profits for the first half of $8.05 million - the first time the group has been in the black for six years.

Turnover rose 150 per cent to $1.1 billion while earnings per share were 0.06 cent.

 Mr Ha said: ''Just look at that turnaround. We put in the money and our management turned the company around. We sold part of it, but kept the company growing and growing. I would not describe it as an exceptional item. I would describe it as part of our on-going business.'' He said it also illustrated the company's strategy of buying an ailing concern and rejuvenating it through investment and management.

 ''When we bought the company [Capetronic] it was quite good. The main thing wrong was morale. We needed to inject money and strong management. Now there is no problem in sustaining the orders.

 ''We have to keep expanding and expanding. But we are a small company and cannot afford to buy companies on 20 times multiples.''  The company's corporate shopping list includes some concerns in Europe which, he believes, are undervalued despite the gradual recovery from recession.

''There are quite a number of good companies that have under-performed in Europe for quite a long time. As the European economy has been bad we believe there is an opportunity to pick them up and turn them around. Now is a good time to buy in Europe,'' Mr Ha said.

 The company also has designs on US-listed MTC Electronics Technologies. However, it said it would not move until the dispute between MTC's management and a former chairman was settled.

It is also building a one million sq ft plant in China, which handles about 25 per cent of its manufacturing.

The other major division, Lafe International, which manufactures magnetic heads, also reported a turnaround in attributable profit to $38.77 million for the six months to June 30.

Profit has also been boosted by the strengthening of the yen. Japanese manufacturers had been sourcing more overseas products and this led to more orders being placed with the group's consumer electronics division.

''In our view, consumer electronics and manufacturing activities have effectively merged. We are targeting our products at consumers. Computers are no longer the kind of product that average people cannot own. Everything has changed in this market. Everything is moving very fast.''  This week the company unveils a new audio-visual product which, it says, will be a foretaste of things to come.

 The future, Mr Ha said, was in the new generation of multi-media products that would combine home entertainment products, such as compact discs and televisions. Next year, the company would be launching a division committed to the development of these products.

 Through this way, Mr Ha said, he would be able to achieve his goal of doubling the company's turnover to $5 billion over the next three years.

Chronology: 1985: Incorporated under the name Lafe Holdings, engaged in the production of magnetic heads and related components.

1987: Became listed by offering 79 million shares to the public. 1988: Manufacturing capacity expanded with the opening of Lafe Industrial Park in Panyu, China.

1990: Raised $99 million for business expansion through placement of 233 million shares to Grande International Holdings. Redomiciled to Bermuda under new holding company, Grande Holdings.

1991: Acquired 32 per cent interest in Team Concepts and 31 per cent in Sansui Electric.

1992: Acquired from Sansui the Capetronic group of companies, a manufacturer of computer monitors and audio equipment.

1993: Acquired 34 per cent stake in locally listed television manufacturer, Teletech International Holdings, which owns 50 per cent of Thai-listed Teletech (Thailand).

  Subsequently, the group sold its stake in Capetronic Computer Products, 50 per cent to Teletech International and 50 per cent to Teletech (Thailand), thereby grouping the manufacturing of computer monitors together under the Teletech Group.

 Upon completion of financial restructuring of Teletech this year, the group owns 75 per cent of Teletech International.

 Acquired 70 per cent of shares in Hongkew Holdings International, into which the group injected the Lafe group.

1994: Attributable interim profits increase 47.5 per cent.

  Company plans new division offering interactive multi-media products.



Grande shapes up for the future