Tiangong International Announces 2010 Interim Results

Revenue rose 88.0%  Net Profit Surged 141.9%

HONG KONG, Aug. 25 /PRNewswire-Asia/ --

China's largest integrated HSS and HSS cutting tools manufacturer -- Tiangong International Company Limited ("Tiangong International" or "Company", HKEx stock code: 826), today announced its interim results for the six months ended 30 June 2010 (the "review period").

Driven by a boost in demands for raw materials as a result of the global economic recovery, the Group has achieved significant growth in its results for the first half of 2010. During the review period, revenue of the Group jumped to RMB1,081,293,000, up by 88.0% from RMB575,005,000 of the corresponding period last year. Gross profit increased by 87.6% year-on-year to approximately RMB216,383,000. During the review period, profit and total comprehensive income attributable to equity shareholders of the Group surged 141.9% year-on-year to RMB 110,294,000. Earnings per share were RMB0.26.

Commenting on the Group's performance over the review period, Mr. Zhu Xiaokun, Chairman of Tiangong International, said, "In the second half of 2009, the world economy began to recover slowly from the global financial crisis thanks to the collective monetary and fiscal measures adopted by different governments to boost the economy. Industries such as manufacturing and tooling have been recovering gradually. Automotive and machinery industries have also shown significant improvement as compared with last year. To cope with this changing market environment, the Group implemented measures to lower the production cost while at the same time, maintaining its emphasis on product quality, safety and production efficiency. Leveraging on the high reputation in the industry and long history of supplying high quality products, the Group remains the largest manufacturer of HSS ("High Speed Steel") and HSS cutting tools in China, maintaining the largest market share in the industry with solid results during the review period."

The recovery of manufacturing and tooling industry has led to a rise in the revenue of the Group's products in the first half of 2010. Die steel has become the major stream of revenue during the review period. Revenue generated from die steel increased by 97.9% from RMB197,542,000 to RMB390,981,000, accounting for 36.2% of the total. Meanwhile, revenue generated from HSS and HSS cutting tools reached RMB326,657,000 and RMB216,464,00 respectively, represented 30.2% and 20.0% of the total.

Looking ahead, the Group will capture the opportunities brought by the improved market while controlling production cost strictly and increasing promotional effort in China's HSS market, consolidating its leading position in the industry. The number of our sales centres has increased from 70 at the end of 2009 to 76 as at 30 June 2010 and the Group plans to further expand its network of domestic sales centres in 2010. In addition, driven by the growing automobile and machinery industries in China, domestic demand in HSS cutting tools has been improved. In the second half of 2010, the Group will continue to place emphasis on these sectors. For die steel sector, the Group will introduce certain new die steel product specification to meet the market demand in the second half of 2010. The Group will also focus the promotional effort on the domestic die steel market to capitalize on the growing automobile and machineries industries.

Mr. Zhu concluded, "With the recovery of the HSS & die steel industry from the global economic crisis, we expect the upward trend on order quantities from customers to continue. Being the market leader in the industry and leveraging on our pricing and product quality advantages over our competitors, we strive to further strengthen our business development and aim to providing fruitful returns to the shareholders."

Tiangong International Company Limited

Tiangong International Company Limited, China's largest integrated HSS and HSS cutting tools manufacturer, was listed on the Hong Kong Stock Exchange Company Limited on 26th July, 2007. The Group was China's largest HSS manufacturer for seven consecutive years since 2001, and the largest exporter of HSS in China for three consecutive years since 2005. Meanwhile, in 2007, the Group is also records the highest revenue amongst HSS manufacturers and exporters. The Group's core businesses are the production of HSS, HSS cutting tools and mould steel. HSS is a type of special steel, due to its highly manipulative feature, it is widely applied in different industries, such as aviation, automobiles, high speed railways and petrochemical. Other industries such as machinery, automobile manufacturing, construction, renovation, agricultural and home appliances are also creating business opportunities for HSS cutting tools. Tiangong International manufactures different types of products, with 27 patents for its products, The Group exports to over 35 countries around the world, to over 160 international tools manufacturers and retailers. With the great development potential, Tiangong International is dedicated to become the world's largest HSS and HSS cutting tools manufacturer.

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