Greens Announces 2010Interim Results

Gross margin of Economiser and Waste Heat Recovery Products Surged to 34.0% and 54.3%

Expansion Global Sales Network of Strategy Developments 

HONG KONG, Aug. 26 /PRNewswire-Asia/ --

Greens Holdings Ltd ("Greens" or the "Company", together with its subsidiaries, the "Group"; stock code: 01318.HK), a leading supplier of key heat transfer products designed to enhance energy efficiency, today announced that its interim results for six months ended 30 June 2010 (the "period under review").

During the period under review, revenue of Group dropped 19.6% period-on-period to approximately RMB 256.1 million, while gross margin significantly improves to 33.6% as compared with 27.5% for the corresponding period last year. Profit attributable to shareholders, however, decreased 11.6% from approximately RMB 35.1 million to approximately RMB 31.1 million. Basic earnings per share amounted to RMB 0.025, versus approximately RMB 0.039 as of 30 June 2009.

Mr. Frank Ellis, Chairman, CEO and Executive Director of Greens, said, "Whilst the International market is still slow to recover from the ongoing uncertainty among major world economies, our gross profit margin and net profit margin both upsurged as compared with that of the first half of 2009. China business has remained stable due to strong support from the government and its policy of investment in major infrastructure projects as well as a commitment to emissions reduction and cost-saving through improved fuel consumption efficiency. Leveraging on such favorable market dynamics, our core line, economizers and marine products has remained stable because of market success in China and Europe (outside the United Kingdom) and the outlook for growth looks encouraging despite intense competition."

As the largest economiser producers in the world, the Group's sales of economisers recorded an increase of approximately 32.9% to approximately RMB114.0 million for the Period (six months ended 30 June 2009: approximately RMB85.8 million). China continued to be the major market for the Group's economisers during the Period and the Company is also now penetrating the Indian market and focusing on the markets in Eastern Europe and South Asia. Gross margin for economisers increased to 34% during the Period representing a 6.6% increase over corresponding period last year.

The Group also supplies a variety of waste heat recovery products, including HRSG products and waste heat boilers which are designed to reduce pollution by lowering excess high temperature emissions exhausted to the atmosphere. Turnover of waste heat recovery products remained at a stable level of approximately RMB82.3 million for the Period (Six months ended 30 June 2009: approximately RMB80.3 million). Gross margin for waste heat recovery products raised to 52.3% from 40.3% year-on-year, as the Group has engaged in a substantial order with a reputable international power plant design and construction company under a free-issue basis (i.e. customer provides raw materials).

The gradual expansion of the Group's production facilities in China with the net proceeds (the "IPO Proceeds") from the listing of the Company's shares on the main board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") in November 2009 has been especially helpful to the Group's waste heat recovery products division and this has opened up new opportunities with major boiler companies as well as with EPC (Engineering, Procurement and Construction) contracting, a common business practice within the waste-to-energy and biomass industries.

Electricity sales from the Xinjiang Project were being affected by the government's regional administrative policies with respect to the consolidation of coal resources and the operational volume of coal mines. These measures have had a considerable negative affect on coking factories. Restricted operating volumes and frequent halts in production caused by an uneven supply of raw materials have distorted the volume of waste heat generated by Xinjiang Coke. This, in turn, has directly caused the Xinjiang Project to operate at below average capacity and caused the Group to suffer operating losses. The local government has granted various forms of subsidy to compensate the Group accordingly.

Looking ahead, the Group has set sights on further market expansion in India for Economisers and Waste Heat Recovery Products due to its new Indian subsidiary has received a strong customer response for HRSGs and other waste heat recovery products. The Group will continue to lay a solid foundation to supply 'green' products to the South Asia market from Singapore through its new Singaporean subsidiary and by using it as a strategic regional sales and marketing hub. The UK subsidiary of the Group is focusing on developing markets in Eastern Europe and Middle East.

Commenting on the future, Mr. Ellis concluded, "Looking ahead, we are positioned to meet the global trend and demand and is able to secure the best opportunities whenever they arise. To that end, capital expenditure plan with the following key points has been established: Firstly, production capabilities at existing plants in China will continue to be expanded in a prudent manner to keep pace with demand and anticipate fluctuations in market requirements for each product segment. Secondly, aiming for the broader target markets of South Asia and Central Asia, we will negotiate to acquire licenses and technologies for power plant designs and 9F Class HRSGs continue apace. Thirdly, we will consider building the first assembly line in India when turnover continues to grow to more mature and sustained volume levels. Given today's macro economic turbulence and low market visibility, the Group will adopt a cautious and careful approach to secure higher return for the shareholders."

About Greens Holdings Ltd (01318.HK)

Greens Holdings Ltd is leading international supplier of key heat transfer products and solutions designed to enhance energy efficiency and help reduce heat and Carbon Dioxide emissions. Based in China and the UK with manufacturing facilities in Shanghai and Jiangsu Province of the Yangtze River Delta, the PRC, Greens focuses on the manufacture of high quality economisers used in coal-fired power plants, waste heat recovery products such as Heat Recovery Steam Generators (HRSGs) and waste heat boilers, marine products, boiler components as well as providing related services and repairs. Recently, Greens has diversified into other alternative energy solutions such as waste heat power generation and the production of wind turbine towers to benefit from the rising demand for alternative energy

Greens has a global sales network and it covers Europe, China, India, Japan, South and North America and other parts of Asia. It received certifications from leading agencies around the world, including ASME certificates in the U.S. and the EN certificate in Europe.

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