Plastec Technologies (PLTYF) 6-K Plastec Technologies, LTD. Reports Unaudited

Plastec Technologies, Ltd.

PLASTEC TECHNOLOGIES, LTD. REPORTS UNAUDITED

FISCAL 2011 SECOND QUARTER AND SIX MONTH FINANCIAL RESULTS

FOR ITS OPERATING SUBSIDIARY

FY 2011 Q2 Financial Highlights

· Record sales of $47.5 million, an increase of 52.6% year-over-year

· EBITDA of $10.8 million, up 49.7% year-over-year

· Net profit of $5.7 million, an increase of 92.5% year-over-year

Fiscal 2011 Six Month Financial Highlights

· Record sales of $86.2 million, an increase of 38.9% year-over-year

· EBITDA of $20.3 million, up 33.9% year-over-year

· Net profit of $10.3 million, an increase of 53.2% year-over-year

· $10.1 million cash generated from operations for the six months ended October 31, 2010

Hong Kong – December 20, 2010 – Plastec Technologies, Ltd. (OTCBB: GSMXF, GSMEF, GSMWF) (the “Company”), an integrated plastic manufacturing services provider that operates in the People’s Republic of China through its wholly owned subsidiary, Plastec International Holdings Limited (“Plastec”), today reported interim, unaudited financial results for Plastec’s fiscal 2011 second quarter and six months ended October 31, 2010.  These financial results reflect those of Plastec on a stand-alone basis, without adjustment, prior to its merger with the Company on December 16, 2010.  See attached tables in Hong Kong Dollars (HKD).  All other amounts in this press release are presented in US dollars ($USD) with a conversion rate of 1.0USD: HK$7.8.

Mr. Kin Sun Sze-To, Chairman of Plastec, stated, “The last several weeks have been a landmark period in our company’s history, as we completed our merger with GSME Acquisition Partners I and became part of a publicly traded company.  We were very pleased with our growth and profitability during the quarter and believe that Plastec, as well as the Company as a whole, is well-positioned and capitalized to safely expand on our strong market position in the precision plastic mold fabrication and design industry.

“We remain very optimistic about the growth opportunity at each of our business segments.  We continue to leverage our long-term customer relationships, many of whom have worked with Plastec for over 5 years.  A number of these clients have indicated their optimistic forecast for coming years, and we have benefitted by providing our high-quality precision plastic molding services for these new product lines.  Further, we are continuing to add capacity onto our existing operations, and expect to complete extensions at our largest facility in Shenzhen by September 2011.  This would add approximately 20% additional capacity across our Company.  Over the past three years, we have invested nearly $75 million in the expansion of our business, and believe that we are well positioned to fulfill the growing list of orders for our existing and loyal clients’ new products as well as accommodate new customers.”

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December 20, 2010

Mr. Sze-To concluded, “We benefit from having a team of dedicated employees that manages an integrated company with strong relationships with top vendors in all aspects of our operations.  We believe that we have the right management team in place to continue developing this segment of our business.  The company’s financial situation is very strong, with approximately $20.2 million in cash as of October 31, 2010 and a continued record of generating free cash flow.  We look forward to the future with confidence and will keep shareholders apprised of our progress as we develop as a public company.”

Fiscal 2011 Second Quarter and Six Month Financial Review

· The Company’s total sales for the three month period ended October 31, 2010 increased 52.6% to $47.5 million from $31.1 million.  Plastec’s sales grew during the period largely as a result of increased sales from its existing larger client base (primarily leading, international own brand manufacturers and OEMs of consumer electronics, telecommunication and precision plastic toys).  Plastec’s top 5 customers account for approximately 74% of its revenues, and all have long-standing customer relationships with Plastec, averaging approximately 5 years.  For the six months ended October 31, 2010, Plastec’s total sales were $86.2 million, an increase of 38.9% over the $62.1 million reported in the prior year period.

· The Company’s gross profit margin improved during the three and six months ended October 31, 2010 due to a higher average price for its products, partially offset by increases in wages and raw material costs.  As a percentage of total sales, overall gross margin improved to 19.7% for the three months ended October 31, 2010, up from 17.1% in the prior year period.  Gross margin was 19.5% and 18.7% for the six months ended October 31, 2010 and 2009, respectively.

· EBITDA for the three months ended October 31, 2010 increased 49.7% to $10.8 million from $7.2 million in the prior three month period, and 33.9% to $20.3 million in the first half of fiscal 2011 from $15.1 in the prior year period.  A table reconciling EBITDA to net income can be found at the end of this release.

· Net profit for the three months ended October 31, 2010 was $5.7 million, compared to $2.9 million in the prior year period, and $10.3 million for the six months ended October 31, 2010, compared to $6.8 million in the prior year period.

Balance Sheet Highlights

As of October 31, 2010, the Company had cash and cash equivalents of $20.2 million; working capital of $14.3 million, total bank borrowing of $25.5 million and stockholders’ equity of $81.7 million.

About Plastec

Originally founded in 1993 by Chairman and CEO, Mr. Kin Sun Sze-To, Plastec is an integrated plastic manufacturing services provider that operates in the People’s Republic of China through its wholly owned subsidiaries.  With over 4,600 employees, Plastec currently operates 6 separate, high-output, low-defect facilities (over 159,000 square meters) in 5 locations in Guangdong province in Southern China and Jiangsu province in Eastern China.  Plastec provides precision plastic manufacturing services from mold design and fabrication, plastic injection manufacturing to secondary-process finishing, as well as parts assembly.

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December 20, 2010

Forward Looking Statements

This press release contains “forward-looking statements.”  These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results.  Actual results may differ from expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements.

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CONTACT:	INVESTOR RELATIONS:
Plastec Technologies, Ltd.	The Equity Group Inc.
Eli D. Scher	Adam Prior
Director	Vice President
eli@plastec.com.hk	(212) 836-9606
	aprior@equityny.com
HL Ning
Chief Financial Officer	Katherine Yao
ning@plastec.com.hk	Account Executive
	kyao@equityny.com

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December 20, 2010

Plastec International Holdings Limited

Unaudited condensed consolidated statement of comprehensive income

	3-month ended		3-month ended		6-month ended		6-month ended
	31/10/2010		31/10/2009		31/10/2010		31/10/2009
HK$'K
Sales		370,280		242,699		672,602		484,369
Cost of Manufacturing		297,216		201,260		541,635		393,981
Gross Profit		73,064		41,439		130,967		90,388
Other Income (sundry)		135		865		595		1,491
Interest Income		21		13		38		28
Fair value gain (swap) thru P/L		1		0		1		0
Total other income		157		878		633		1,520
		73,221		42,317		131,600		91,908
Less : Expenses
Selling & Distribution Expenses		7,346		4,083		14,055		7,712
Administrative Expenses		16,278		12,247		26,651		24,756
Total SD & A Expenses		23,624		16,331		40,706		32,468
Profit Before Financial Charges		49,597		25,986		90,894		59,440
Financial Charges		689		678		1,353		1,442
Profit After Financial Charges		48,908		25,308		89,541		57,998
Taxation		4,800		2,399		8,855		5,332
Profit After Taxation		44,108		22,909		80,686		52,666
Other comprehensive income
Ex gain/(loss) on translation of financial statements of foreign operations		60		326		253		233
Total comprehensive income		44,168		23,235		80,939		52,899

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December 20, 2010

Plastec International Holdings Limited

Unaudited condensed consolidated statements of financial position

	as at		as at
	31/10/2010		30/4/2010
	HK$'K		HK$'K
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment		503,325		458,725
Prepaid lease payments		1,078		1,091
Deposits and prepayments		37,475		38,238
		541,878		498,054
Current assets
Inventories		106,772		74,298
Trade receivables		352,529		242,097
Deposits, prepayment and other receivables		7,480		11,714
Prepaid lease payments		25		25
Cash and cash equivalents		157,863		151,304
		624,669		479,438
Current liabilities
Trade and other payables and accruals		248,224		188,258
Borrowings		197,525		123,738
Dividend payable		40,000		60,000
Tax payable		27,533		18,678
		513,283		390,674
Net current assets		111,386		88,764
Total assets less current laibilities		653,264		586,818
Non-current liabilities
Borrowings		1,077		5,570
Deferred tax liabilities		15,156		15,156
		16,233		20,726
Net assets		637,031		566,092

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December 20, 2010

Plastec International Holdings Limited

Unaudited condensed consolidated statement of cash flows

For the period ended	6-month ended			6-month ended
HK$'K	31/10/2010			31/10/2009
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation		89,541			57,998
Adjustments to reconcile net income to net cash provided by operating activities:
Interest incomes		(23	)		(28	)
Interest expenses		977			454
Interest element on finance leases		376			988
Amortisation of prepaid leases		13			13
Depreciation		67,136			59,445
Loss on written/disposals PPE		928			797
		158,948			119,667
Change in assets and liabilities
Inventories		(32,474	)		(5,441	)
Trade receivables		(110,432	)		(38,356	)
Other receivables		4,381			(573	)
Trade and other payables		58,214			22,527
		(80,311	)		(21,843	)
Cash generated from operations		78,637			97,824
Tax paid		0			(7,278	)
cash generated from operating activities		78,637			90,546
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of PPE		(99,492	)		(87,547	)
Interest received		23			28
Deposits paid for acq PPE		(10,804	)		(1,956	)
Net cash used in investing activities		(110,273	)		(89,475	)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital element of finance leases		(5,323	)		(10,769	)
Proceeds from bank loans		249,377			122,234
Repayment of bank loans		(174,760	)		(84,004	)
Interest paid		(977	)		(454	)
Interest element of finance leases		(376	)		(988	)
Dividend paid		(30,000	)		(20,000	)
Net cash generated from financing activities		37,941			6,019
Increase in cash and cash equivalents		6,305			7,090
Cash and cash equivalents at 1 May		151,304			95,039
Exchange realignment		254			291
Cash and cash equivalents at 31 Oct		157,863			102,420

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December 20, 2010

Plastec International Holdings Limited

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

(HKD in 000s)

A reconciliation of EBITDA to net income is provided below:

	3-month ended		3-month ended		6-month ended		6-month ended
	31/10/2010		31/10/2009		31/10/2010		31/10/2009
Net Income *		43,951		22,031		80,053		51,146
Plus: Interest expense		689		678		1,353		1,442
Plus: Income tax expense		4,800		2,399		8,855		5,332
Income from opearations		49,440		25,108		90,261		57,921
Plus: depreciation and amortization		34,698		31,099		67,913		60,221
EBITDA		84,138		56,207		158,174		118,142

This press release includes financial information (EBITDA) not derived in accordance with generally accepted accounting principles or international financial reporting standards.  Plastec believes that the presentation of such financial information provides more useful information to investors as it indicates more clearly Plastec’s future performance.  EBITDA was derived by taking earnings before interest, taxes, depreciation and amortization as adjusted for certain one-time non-recurring items and exclusions.