On behalf of the board of directors (the “Board”) of Mega Medical Technology Limited (the “Company”), I am pleased to present the audited consolidated results of the Company and its subsidiaries (collectively referred to as the “Group”) for the year ended 31 December 2012.

For the year, the Group achieved a revenue of approximately HK$369 million (2011: approximately HK$361 million (restated)), representing an increase of 2% as compared with the same period in 2011. Profit for the year of the Group was approximately HK$312 million (2011: approximately HK$167 million), representing an increase of 87% as compared with the same period in 2011. Earnings per share were 97.59 HK cents (2011: 49.09 HK cents).

BUSINESS REVIEW

Electronic Manufacturing Services Business (the “EMS Business”)

Although the US economy has shown gradual recovery during the year ended 31 December 2012, in 2012 both the U.S. and European economy were still very much in a state of economic doldrums. Following the substantial interruption in the supply chain of electronic consumer products in the world due to the earthquake and tsunami in Japan and the severe floods in Thailand in 2011, decrease in orders from Europe and Japan continued through 2012, affecting the overall sales of the electronic component manufacturing sector.

By exerting significant effort in developing the Korean market in 2011 and 2012, the first-tier customers there have responded well to the production capability and deliverables of the Group. The Group attained remarkable success in obtaining a considerable share of the electronics component manufacturing sector in the Korean market. The Group’s immense efforts put into increasing our market share in Korea was reflected in the increase in orders from Korea which accounted for around 35% of the total number of orders in 2012. This increase offset the impact of the reduced orders from Europe and Japan.

Property Investment Business (the “Property Business”)

From 2004 to the present, the Company built up a second core business in property investments. With a strong balance sheet and good property portfolio, the property portfolio, as appraised by an independent valuer reached a fair value of approximately HK$884 million as at 31 December 2012. During the year, the Company prepared for the spin-off of Wing Lee Property Investments Limited (“Wing Lee Property”) and its subsidiaries (collectively referred to as the “Property Group”) and Wing Lee Property was successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) on 19 March 2013.

PROSPECTS

With the spin-off of the property investment business of the Company now complete, the Group will look forward to focusing on and furthering its manufacturing and trading business.

Our European customers were mostly affected by the economic downturn and during the year ended 31 December 2012, orders from this group declined by around 50%. In addition, our Japanese customers were more detrimentally affected due to a very strong Yen for most part of the year, affecting the sales of completed electrical goods exported from Japan. Although the Japanese currency started to depreciate towards the end of 2012, we would not expect to see the impact of this decline until well into 2013. The most promising market in terms of orders in 2012 was from Korean customers, wherein the Group has secured its market share to first-tier customers there. As the Korean market has become one of the major markets for the Group, the Group is confident in its prospects and will continue to place more efforts into the Korean market.

Looking ahead for the financial year of 2013, we shall be cautiously optimistic about the manufacturing and trading business as we believe that our Korean customers will increasingly patronise us because of our good track record; and we also expect that orders from our major Japanese customers would also increase as the Yen becomes weaker. Such trends should be able to offset the decline in European orders. The Group has sufficient cash reserves and a low borrowing rate. We will seek to lay a solid foundation for the future through expanding customer and product diversity.

APPRECIATION

On behalf of the Board, I would like to take this opportunity to thank all our beloved shareholders, respectable customers, dedicated vendors and professional bankers for their support over the year and look forward to a closer cooperation in coming years.

I would also like to personally thank all management and staff for their hard work and commitment to the Group and cheer them as we tackle future challenges successfully.

Chow Tak Hung
Chairman

Hong Kong, 28 March 2013