China Metal Resources Utilization (Stock Code: 1636) Announces 2017 Annual Results

Revenue Ups 178.5% to approximately RMB13.7 billion

Gross Profit Ups 188.2% to approximately RMB123.6 million

Annual Highlights

• Revenue increased sharply by 178.5% to approximately RMB13.7 billion
• Gross profit increased significantly by 188.2% to approximately RMB123.6 million
• Turnaround of loss to profit attributable to equity shareholders of the Company to approximately RMB184.6 million
• Adjusted EBITDA for the year increased substantially by 519.3% to RMB322.1 million
• Several fund raising activities during the year, with a total amount of approximately HK$1.1 billion; few acquisitions including a pre-IPO investment of 25% equity interest in Sichuan Jin Xunhuan
  E-commerce Trading Co., Ltd. and acquiring 100% equity interests in  two target companies which have production facilities in Sichuan and Hubei

HONG KONG, March 27, 2018 /PRNewswire/ -- China Metal Resources Utilization Limited ("China Metal Resources" or "the Company") (Stock Code: 1636), announced its annual results for the year ended 31 December 2017 ("the year"). During the year, the revenue of the Company significantly increased by 178.5% to approximately RMB13.7 billion (FY2016: approximately RMB4.9 billion). The gross profit of the Company is amounted to approximately RMB123.6 million (FY2016: approximately RMB42.9 million), representing a substantial increase of 188.2% compared to the year of 2016. Besides, the profit attributable to equity shareholders of the Company significantly increased to approximately RMB184.6 million (FY2016: loss of approximately RMB310.8 million). The adjusted EBITDA for the year increased substantially by 519.3% to RMB322.1 million. The basic earnings per share is RMB0.08.

The significant increase in revenue was principally due to the increase in trading of electrolytic copper, the increase in sales volume of recycled copper products and the increase in sales of power transmission and distribution cables. During the year, the sales volume of electrolytic copper is increased by 130.7% to 237,190.5 metric tons (FY2016: 102,832.0 metric tons), with an increase of 25% in average selling price to RMB42,805 per ton (FY2016: RMB34,252 per ton). For the year ended 31 December 2017, revenue from trading of electrolytic copper amounted to approximately RMB10.2 billion for the year (FY2016: approximately RMB3.5 billion), representing a significant increase of 188.3% compared to the same period last year.

The sales volume of recycled copper products is increased by 105.7% to 82,866 metric tons (FY2016: 40,282 metric tons), with an increase of 25.5% in average selling price to RMB42,628 per ton (FY2016: RMB33,960 per ton). For the year ended 31 December 2017, revenue from trading of recycled copper products amounted to approximately RMB3,532.4 million for the year (FY2016: approximately RMB 1,367.9 million), representing a significant increase of 158.2% compared to the same period last year.

Moreover, the sales volume of power transmission and distribution cables is increased significantly by 2,026.7% to 1,595 metric tons (FY2016: 75 metric tons). For the year ended 31 December 2017, revenue from trading of power transmission and distribution cables amounted to approximately RMB13.5 million (FY2016: approximately RMB3.1 million), representing an increase of 335.3% compared to the same period last year.

In order to take advantage of the expected recovery of the industrial metal market, the Company underwent several fund raising activities during 2017, namely, an issuance of approximately 74 million new ordinary shares for net proceeds amounted to HK$194 million in June 2017, an issuance of convertible bonds with a total principal amount of HK$250 million in April 2017 and an issuance of convertible bonds with a total principal amount of HK$600 million in August 2017. In order to grasp the favorable opportunities to expand the scale, the Company also undertook few acquisitions recently, namely, the completion of a pre-IPO investment of 25% equity interest in Sichuan Jin Xunhuan E-commerce Trading Co., Ltd. ("JX E-commerce") in October 2017, the entering into sale and purchase agreements to acquire two target companies which have production facilities in Sichuan and Hubei in December 2017 and February 2018, respectively.

With the expected continued improvement in China's economy, commodity prices in China, especially industrial metal prices, are expected to continue to increase in the future. Potential demand for industrial metals will also increase if the global economy continues to improve. China has enforced a new regulation to prohibit the import of scrap metals into China as from 2018. Recent China Customs data showed that in January 2018 China's import of scrap copper decreased by 27.5% and 24.0% as compared to January 2017 and December 2017 respectively. Such new policy has created a solid catalyst for the improvement of industrial metal prices.

Mr. Yu Jianqiu, Chairman of the Company, concluded, "We are delighted to see the robust growth of profitability of the Company after the pickup of utilization of production capacity. We are dedicated to increase our financial strength in order to take full advantage of further improvement in the market environment to strengthen our business and increase profitability for our shareholders. As part of our expansion strategy, we shall continue to scale acquisition opportunities which will enhance our shareholder's value.

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About China Metal Resources Utilization Limited

China Metal Resources Utilization Limited ("China Metal Resources" or "the Company") (Stock Code: 1636.HK) is a leading manufacturer in scrap copper industry. The Company has a fully integrated value chain with a production and service business model, with business consisting of scrap metal recycling, standard processing and metal deep processing products. By making use of the internet, the Company also provides a comprehensive platform combined with recycle metal information, warehouse logistics and financial services, providing services including recycled metal production, sale and related services. China Metal Resources is mainly involved in the sale of deep processed metal products and scrap metal value chain integrated services, in which deep processing metal includes the processing of recycled scrap copper, scrap aluminium, turning them into different copper and aluminium products such as copper rod, copper bar, copper wire as well as cable, wire and network cable; while scrap metal value chain integrated services include standard metal recovery processing, warehouse logistics, transaction settlement and financial services.

The press release is distributed by Vitalink Consultants on behalf of China Metal Resources Utilization Limited.