Man Sang Holdings, Inc. Announces Financial Results for the Nine-month Period Ended December 31, 2004

Business Wire, Feb 7, 2005

NEW YORK -- Man Sang Holdings, Inc. (OTC Bulletin Board: MSHI) today announced its financial results for the nine-month period ended December 31, 2004.

Net sales increased 15.0% to HK$316.1 million (US$40.5 million) as compared to the same period in 2003. Gross profit increased 27.3% to HK$87.8 million (US$11.3 million). Net income for the nine months ended December 31, 2004 was HK$22.4 million (US$2.9 million).

Overall sales performance has been benefited from the improvement in global economic conditions. The improvement in performance for the nine months is mainly due to the increase in sales in the first quarter of this fiscal year compared to the same quarter last year, which was adversely affected by the negative economic effects of Severe Acute Respiratory Syndrome ("SARS") and the Iraq war.

Our key performer on the pearl side of the business continues to be South Sea pearls, including white and gold South Sea pearls and Tahitian Black pearls, which represented 42.5% of the Group's total turnover for the nine months ended December 31, 2004. In addition to South Sea pearls, sales of assembled pearl jewelry and jewelry products in North America and Europe are growing at a healthy pace due to the increased popularity of pearl jewelry products.

We will continue to emphasize expansion of our assembled jewelry products business, while maintaining steady growth in our core pearl business.

"We continue to look for opportunities to venture into new market segments, to enlarge our customer base and to solidify our market position," said Mr. Ricky Cheng, Chairman of Man Sang. By attending international tradeshows and exhibitions and adopting aggressive marketing and flexible pricing strategies, we believe that we can further expand our market share and customer base. Mr. Ricky Cheng further said, "we closely monitor changes in market demand, environment and conditions so that we can react to such changes. By diversifying our product range, we expect to further increase our sales. To support increasing sales and to improve product quality, we intend to expand our production facilities. Furthermore, we maintain effective cost control measures to increase our competitiveness."

Man Sang, founded in the early 1980's, is one of the world's largest purchasers and processors of Chinese cultured and freshwater pearls. The Company owns and operates an industrial city in Shenzhen, the PRC, which houses its pearls and jewelry processing facilities. It distributes both its pearls and jewelry products to customers worldwide.

* The consolidated financial statements of the Company are maintained, and its consolidated financial statements are expressed, in Hong Kong dollars. The translations of Hong Kong dollar into United States dollars are for convenience only and have been made at the rate of HK$7.8 to US$1, the approximate free rate of exchange as of December 31, 2004. Such translations should not be construed as representations that Hong Kong dollar amounts could be converted into United States dollars at that rate or any other rate.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are, by their nature, subject to risks and uncertainties. This Act provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements, other than statements of historical fact, including statements regarding industry prospects and future results of operations or financial position, made in this press release are forward looking. Words such as "anticipates," "believes," "expects," "future" and "intends" and similar expressions may identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to: the Company's future performance, the Company's expansion efforts, the state of economic conditions and the Company's markets; currency and exchange rate fluctuations; and the Company's ability to meet its liquidity requirements. These forward-looking statements are based on assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors the Company believes to be appropriate in particular circumstances. However, whether actual results and developments will meet the Company's expectations and predictions depends on a number of known and unknown risks and uncertainties and other factors, any or all of which could cause actual results, performance or achievements to differ materially from the Company's expectations, whether expressed or implied by such forward-looking statements (which may relate to, among other things, the Company's sales, costs and expenses, income, inventory performance, and receivables). Primarily engaged in the processing and trading of pearls and pearl jewelry products, and in real estate investment, the Company's ability to achieve its objectives and expectations are derived at least in part from assumptions regarding economic conditions, consumer tastes, and developments in its competitive environment. The following assumptions, among others, could materially affect the likelihood that the Company will achieve its objectives and expectations communicated through these forward-looking statements: (i) that low or negative growth in the economies or the financial markets of its customers, particularly in the United States and in Europe, will not occur and reduce discretionary spending on goods that might be perceived as "luxuries"; (ii) that the Hong Kong dollar will remain pegged to the US dollar at US$1 to HK$7.8; (iii) that customer's choice of pearls vis-a-vis other precious stones and metals will not change adversely; (iv) that the Company will continue to obtain a stable supply of pearls in the quantities, of the quality and on terms required by the Company; (v) that there will not be a substantial adverse change in the exchange relationship between the renminbi ("RMB") and the Hong Kong or US dollar; (vi) that there will not be substantial increase in tax burden of subsidiaries of the Company operating in the PRC; (vii) that there will not be substantial change in climate and environmental conditions at the source regions of pearls that could have material effect on the supply and pricing of pearls; and (viii) that there will not be substantial adverse change in the real estate market conditions in the PRC and in Hong Kong. This press release should be read in conjunction with the financial statements and the notes thereto included elsewhere in this Form 10-Q and with the Company's annual report on Form 10-K for the year ended March 31, 2004, which contains a further description of risks and uncertainties related to forward-looking statements, as well as other aspects of the Company's business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company will not publicly release any revisions to these forward-looking statements after the date hereof. Readers are urged, however, to review the factors set forth in reports that the Company files from time to time with the Securities and Exchange Commission.