Sun Innovation Reports Interim 2006 Results

Sun Innovation Reports Interim 2006 Results

HONG KONG, Oct. 2 /PRNewswire/ -- Sun Innovation Holdings Ltd. (the "Group"), a Hong Kong-based multinational corporation with entertainment media content distribution as its core business, reported that for the six months ended June 30th, the Group's revenues more than doubled from HK$25,803,000 (approximately US$3,311,000) in 2005 to HK$53,712,000 (approximately US$6,924,000) in 2006. Over 90 percent of the Group's revenue was derived from its entertainment content distribution businesses. More specifically, the Group provides services through the versatile deployment of two distribution platforms -- digital kiosks in Japan and mobile multimedia value added services in Hong Kong, Macau and Mainland China.

Included in the Group's total revenue was HK$894,000 (approximately US$115,000), which was derived from the Group's recently established product fulfillment and customer service support business unit. This unit currently provides services to Mainland China's television home shopping sector, primarily directed at the Guangdong Province.

The Group's loss for the period reduced by 18.9 percent in the first half of the year to HK$18,465,000 (approximately US$2,380,000), reflecting primarily higher operating income. However, during the period, the Group's administrative and operating expenses rose 27.4 percent to HK$28,475,000 (approximately US$3,671,000). Among which, approximately HK$5 million (approximately US$645,000) of the increase was due to legal and other costs associated with settling two legacy lawsuits inherited under the Group's previous name of Mansion Holdings Ltd. These settlements end most of the Group's legacy lawsuits.

Finance costs also increased to HK$6,982,000 (approximately US$900,000) during the interim period from HK$2,468,000 (approximately US$317,000) in 2005, primarily reflecting the leasing fees associated with the digital kiosks the Group utilizes to distribute its entertainment content in Japan. Since the launch of its digital kiosk distribution platform under the brand name DigiRaku in August 2005, a total of 1,795 digital kiosks have been deployed throughout Japan, including the nation's two major cities Tokyo and Yokohama.

For the interim period ended June 30th, 2006, the loss per share was HK$0.21 (approximately US$0.03), compared to a loss of HK$0.37 (approximately US$0.05) over the same period last year.

Michele Matsuda, Chairman and Chief Executive Officer, said, "We are very pleased with the interim financial results for the period ended June 30th, which have us on track to realize a successful turnaround since restructuring the Group in March 2003. Especially significant was the better than expected sales from our digital kiosk business in Japan and larger than expected revenue from our new product fulfillment and customer support business in Southern China." Mr. Matsuda added, "These new milestones, together with the ending of our legacy businesses this year, has positioned Sun Innovation Holdings to expand its content media distribution platforms foremost in Japan, followed by Hong Kong, Macau and Southern China, as well as to further our business support services directed at China's television home shopping sector, and to increase our property investment base. We are committed to increasing shareholder value through the growth of our businesses as well as tapping into new investment markets overseas. This includes evaluating additional markets for a stock listing, including the United States, in order to foster greater stock liquidity and valuations."

For a copy of the Group's complete Interim 2006 Report, please contact the Investor Relations department.

About Sun Innovation Holdings Ltd.:

"Our mission is to build the most innovative multimedia conglomerate in Asia, through balanced investments in media-related businesses with superior growth potential."

Sun Innovation Holdings Ltd. is a Hong Kong-based conglomerate trading on the Main Board of the Hong Kong Stock Exchange (stock code: 547).

Certain statements contained in this press release related to Sun Innovation Holdings Limited's business are not historical facts. Such statements may be regarded as forward-looking statements. Forward-looking statements are made on the basis of management's views and assumptions regarding future events and business performance as of the time the statements were made. Management does not undertake any obligation to update these statements -- Accordingly, risks and uncertainties are inherent as actual results may differ materially from those expressed or implied.

Contact:
Alicia Swanson - Senior Investor Relations Manager
Tel: +1-808-394-6695
Email: aswanson@suninnovation.com
Web site: www.suninnovation.com

Source: Sun Innovation Holdings Ltd.

CONTACT: Alicia Swanson, Senior Investor Relations Manager of Sun
Innovation Holdings Ltd., +1-808-394-6695, aswanson@suninnovation.com

Web site: http://www.suninnovation.com/

-------
Profile: intent