Trading Statement

14 Feb 2008 07:01

Et-china.com International Holdings14 February 2008 For Immediate Release 14 February 2008 ET-CHINA.COM INTERNATIONAL HOLDINGS LIMITED ("Et-china", "the Group" or "the Company") Trading Update Strong Growth Achieved in 2007 Et-china.com International Holdings Limited, the leading travel services groupin the fast growing region of South China, announces its trading update for 2007which underlines its progress. The Group delivered a strong trading performance for the whole of 2007,benefiting from the buoyant Chinese travel market with a particularly goodperformance from its GZL tour operating business. Overall Group gross revenue for 2007 amounted to RMB 2,577 million (£177 million*), net revenue was RMB1,710 million (£117 million) and gross profit was RMB 163million (£11 million). While no direct comparable numbers are available for theGroup, the two main operating subsidiaries are significantly ahead of their 2006results as independent businesses. GZL, which is one of the largest travel package holiday providers in South Chinaproviding tour packages through 160 high street stores and a 24x7 call center,served approximately 1 million package tour travelers generating net revenue ofRMB 1,643 million (£113 million), an increase of 37.64% over the correspondingperiod last year. Gross profit was RMB 148 million (£10 million), a 32.94%increase over last year. Whilst the percentage split of travel destinationsremained broadly similar to the prior year; being 51% outbound, 41% domestic and5% inbound, the absolute number of inbound travelers has increased, reflectingthe Group's continued effort to attract additional visitors, particularly fromJapan and Korea. In 2007, the Et-china Limited subsidiary ("Et-china"), which is primarilyfocused on the frequent independent traveler and corporate account markets, alsoachieved strong growth. Gross revenue increased to RMB 445.51 million (£30.55million), net revenue was up 120% to RMB 67 million (£5 million) and grossprofit grew to RMB 14 million (£1 million) in 2007. The e-ticketing business, a joint venture with China's largest airlines, ChinaSouthern Airlines, achieved an 85% increase in total transaction value and 53%increase in net revenue over the whole year compared with 2006. Totaltransaction value was RMB7,808 million (£536 million) and net revenue RMB28million (£2 million). In addition to the strong performance of the package tour operations, GZL hasseen a substantial strengthening of its balance sheet due to the developments atone of its long-term investments, the equity investment in the GrandBuyDepartment Store in Guangzhou. It was a small investment made many years agobefore Et-china.com International acquired the controlling stake in GZL.GrandBuy went public in November 2007 on the Shenzhen Stock Exchange located inSouth China. Based on the closing price of GrandBuy of RMB42.99 per share as at31 December 2007, the market value of GZL's investment would be RMB103.2million. The difference between the fair value and the original cost of RMB3.6million is RMB99.6 million (£6.8 million). Matthew Ng, President and Chief Executive Officer, commented:"I am delighted with the Group's performance. We have seized the opportunitiesin a fast growing market and achieved strong growth across all our divisionswith GZL, our tour operating business providing an outstanding performance. Thetravel market in China continues to provide tremendous opportunities and,coupled with the growth expected in the Chinese economy, we are looking forwardto a strong year of tourism growth in 2008 and beyond." Contact details for enquiries: Et-china.com International Holdings Limited +44 (0)207 067 0700Matthew Ng Seymour Pierce, Nomad and Broker +44 (0)207 107 8000Mark Percy Weber Shandwick Financial +44 (0)207 067 0700Terry GarrettStephanie BadjonatJohn Moriarty *All numbers in the trading update are un-audited. Currency in this release isconverted on the basis of GB£1 = RMB 14.5807 This information is provided by RNS The company news service from the London Stock Exchange