HONG KONG electronics firms are increasingly floundering in the battle to make profits and share-price growth is slipping behind the performance of the Hang Seng Index. Of 32 Hong Kong-listed firms which make or made most of their profits in electronics manufacturing or distribution, 12 saw major falls in profit for the last full year and more have reported interim results showing profit collapse, data provided by Investamatic Hong Kong shows. The worst profit collapse saw China Everbright losses expand from HK$35.2 million in 1993 to HK$216.81 million last time around, a slide of 516 per cent. Hanny Magnetic, which has now been rescued by Hutchison Whampoa following a disastrous acquisition, fell by 76.3 per cent to HK$30.82 million. The biggest profit growth came from Vtech, where the net grew from US$3 million to US$9 million. But this jump was not based on strengthening operations as operating profit fell from US$17.9 million to $15.9 million. The second biggest profit growth between 1993 and 1994 came from Prod-Art Technology, which makes English and Chinese language pagers and translators. It saw profits grow 195.4 per cent to HK$63.28 million at the last full year. But when it announced interim results this August for the six months to June 30, it blamed declining sales in China for a HK$22.6 million loss compared with the previous year's HK$43.3 million profit. With world markets at their best in 10 years, this should be a dream period for electronics makers, but not all Hong Kong firms are healthy. Instead a few firms are reaping rewards, some are floundering and others have started illustrating the fronts of company reports with pictures of their new property development and making most of their profits from asset sales. In the year from March 1993 to March 1994, most of the 32 stocks, which include Hang Seng constituents like Johnson Electric and small firms like Team Concepts and Kosonic, under-performed the Hang Seng Index, according to Investamatic. The average change in share price was 16.99 per cent but the average relative under-performance was 17.22 per cent. Some 24 of the stocks under-performed the index on the period compared with eight out-performers. The stocks which out-performed were Alco Holdings, Shell Electric, Truly International, Ultronics, Vtech, Elec & Eltek, Applied International and Herald Holdings. The worst under-performer was Orient Power which was 68.35 per cent below the index over the year. In May, Orient reported profits for the year to December 31, 1993, down by 75 per cent to HK$10.1 million. Bloomberg data from March 1990 or listing date show a similar number of under-performers and out-performers. The best performance since listing was by Champion Technology which has out-performed the index since March 1992 by 554.3 per cent. Champion makes and distributes pagers and is well-known among analysts for organising good company visits. Last time out its profits rose by 29 per cent to HK$180 million. Its annual report also reveals details of huge sums of cash owed by mainland subsidiaries. The biggest profit growth came from Vtech where the net grew from US$3 million to US$9 million. But this jump was not based on strengthening operations as operating profit fell from US$17.9 million to $15.9 million. Nancy Kang, analyst at Salomon Brothers, said that there were sharp difference in performance by electronics companies in different sectors of the market. 'There is very definitely an electronics sector in Hong Kong although most of the firms manufacture outside the territory in Guangdong,' she said. 'Many of them focus on making toys and relatively low-end products with brand names unknown outside China. 'There is little product quality and they compete with other manufacturers on price, not on quality or design,' she said.