Resilent sales. Against a global slowdown in the electronics sector,
Willas-Array’s revenue has been holding up well with a 7.9% y-o-y
increase to HK$1.4b for 1HFY3/09 due to strong sales in China.
However, the outlook is not very optimistic given that many electronic
manufacturers adopt a precautionary stance and have either decreased
or postponed their orders.

Weakening earnings.1HFY3/09 gross and net margins dropped y-o-y
from 11.6% to 10.2% and from 2.0% to 0.6% respectively. Profits
attributable to shareholders dived by a significant 69.9% to HK$7.9m.
Reasons for the lower profitability were mainly due to

i. higher cost of sales as the company made a deliberate decision to
clear the excess inventory at lower price;
ii. higher distribution costs from increased marketing activities and
sales incentives; and
iii. higher administrative expenses from higher headcount and
increase in bank charges relating to loan arrangement and use of
credit insurance services.

Fair Value S$0.075