Trade war impacts Man Wah

Business | Stella Zhai 22 May 2019

Furniture maker Man Wah (1999) reported its net profit for the year ended March 31 which declined 11.1 percent year on year to HK$1.36 billion amid the trade war.

Revenue for the financial year rose 12.3 percent to HK$11.3 billion, and the company declared a final dividend of 6 HK cents.

Chairman Wong Man-li said the company had acquired a factory in Vietnam last year with US$68 million (HK$530 million) to avoid additional tariffs due to the trade war, but he expects the company's revenue for the first half of the year will still be under pressure.

The factory, with an annual output of 300,000 units, accounts for 40 percent of Man Wah's total export to the United States. The company plans to transfer all US orders to the factory next August, said Wong, adding that it will help offset impacts of the trade tension.

The company expects its capital expenditure to be US$700 million to US$800 million in the next two years, with US$200 million to US$250 million spent on the factory.

Shares of Man Wah rose 5.25 percent to HK$3.61 yesterday.

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