09:41     KINGBOARD CHEM<00148> - Announcement (4)                            

    total bank loans so as to reduce interest rate                            
    exposure.                                                                 
                                                                              
    Order book of the E&E Group                                               
                                                                              
    The booking for PCB (as defined below) business is                        
    holding well for the first quarter of the financial                       
    year ending 30 June 2005. The LCDs and Magnetic                           
    Products (both as defined below) business will be                         
    expected to see expansion in volume of business in                        
    the coming financial year.                                                
                                                                              
    Material acquisition and disposal of subsidiary by                        
    the E&E Group                                                             
                                                                              
    The E&E Group had no material acquisition and disposal                    
    of subsidiary during the year ended 30 June 2004.                         
                                                                              
    Comments on segmental information of the E&E Group                        
    The E&E Group's principal business activities consist                     
    of manufacturing of printed circuit boards ("PCBs"),                      
    liquid crystal displays ("LCDs") and magnetic                             
    products ("Magnetic Products").                                           
                                                                              
    PCBs                                                                      
                                                                              
    Starting from the beginning of the financial year                         
    ended 30 June 2004, the global economy has been                           
    recovering steadily, with the computer sector began                       
    in July 2003 and followed by the communication sector                     
    in October 2003.                                                          
                                                                              
    During the year ended 30 June 2004, there were usual                      
    short-term seasonal adjustments for different                             
    industrial sectors. The PCB demand for computer                           
    sector adjusted downwards during December 2003                            
    through March 2004 after the end of the Christmas                         
    seasonal spending period. The PCB demand for the                          
    communication sector also started to slow down in                         
    around April 2004 after a continuous business growth                      
    of nearly six months.                                                     
                                                                              
    The ongoing E&E Group's strategy in relation to PCBs                      
    is to strive for equal market participation in each                       
    of the three key industrial sectors, namely the                           
    computer & computer peripherals, communication and                        
    consumer & automotive. As a result, the PCB business                      
    was able to smooth out short-term seasonal slowdown                       
    in each sector through the development of new business                    
    or the obtaining of higher allocation of business from                    
    other sectors.                                                            
                                                                              
    Through outsourcing of manufacturing as well as                           
    components sourcing in China, the PCB business was                        
    able to enjoy higher growth as compared with other                        
    PCB manufacturers in higher cost countries.                               
                                                                              
    Due to the increasing PCB demand in China, the E&E                        
    Group's shipments to China had increased from                             
    approximately HK$489.0 million for the year ended 30                      
    June 2003 (25.6% of PCB turnover) to approximately                        
    HK$818.4 million for the year ended 30 June 2004                          
    (29.7% of PCB turnover).                                                  
                                                                              
    The PCB backlogs of the E&E Group increased with                          
    book-to-bill ratio as at 30 June 2004 stood at above                      
    1.01 despite higher shipments with the benefit of                         
    capacity expansion.                                                       
                                                                              
    Although there were short-term adjustments in the                         
    communication sector, the supply and demand for PCBs                      
    in China region remained relatively balance.                              
                                                                              
    The average selling prices ("ASP") of the E&E