International Mining Machinery Holdings Limited Achieves Record Performance in 2010

Adjusted Net Profit Surges 78.0% to RMB436.7 Million Gross Profit

Margin Further Improves to 43.3%

HONG KONG, March 16, 2011 /PRNewswire-Asia/ -- International Mining Machinery Holdings Limited (“IMM” or “the Company”; HKEX: 1683), a leading designer and manufacturer of underground longwall coal mining equipment in China, is pleased to announce its first full year results following its listing in 2010.

Financial Highlights

1. Amounts exclude non-recurring items associated with the Company’s recent Global Offering and the granting of a waiver of taxes for periods prior to the formation of the Company.
2. Earnings per share are calculated by dividing profit attributable to the equity holders of the Company by the weighted average number of shares outstanding during the period (2010: 1,242,222,222 and 2009: 780,000,000).

The Company achieved record performance during the review year, its revenue increased by 27.8% to RMB 1,942.6 million as a result of the strong market demand for its roadheaders, shearers, armoured-face conveyors and related products and the electric control systems from its newly acquired controls business. Adjusted net profit surged by 78.0% to RMB436.7 million, excluding non-recurring charges related to its recent Global Offering and non-recurring income from the waiver of taxes related to periods prior to the formation of the Company. The strong financial performance was primarily attributable to IMM’s successful expansion strategy, strict cost control measures, and proactive expansion of customer base.

IMM’s gross profit surged 46.4% to RMB842.1 million and its gross profit margin grew an impressive 5.5 percentage points year-on-year to 43.3%. The significant improvement reflected the management’s operational excellence and the increased revenue contribution from the sales of higher margin products.

In 2010, the demand for the Company’s products remained strong. Sales of roadheaders surged by 32.1% to RMB1,081.8 million on strong demand for higher margin products such as medium and heavy-duty roadheaders as the Company stepped up its product development efforts to meet the evolving demands of customers. Revenue from the sale of shearers grew 17.9% to RMB538.6 million, primarily due to robust demand for medium seam shearers. Revenue from the sale of armoured-face conveyors and related products registered a 9.8% year-on-year increase to RMB267.5 million despite the moving of its factory in the first half of 2010. An addition to its product portfolio this year, electric control systems, contributed RMB54.7 million to the Company’s revenue during the four-month period from the date of acquisition to the end of the year.

Mr. Thomas H. Quinn, Chairman of IMM, said, “Apart from our record performance, we achieved many significant milestones this year. These include the listing of the Company’s shares on the Main Board of the Hong Kong Stock Exchange, the acquisition of Qingdao Tianxun, the establishment of a joint venture with Shanxi Coal Transportation and Sales Group, as well as the entrance into international markets. These developments not only contributed to IMM’s record performance, but have also laid a solid foundation for our future growth in the years ahead.”

Acquisition

On 27 August 2010, the Company completed the acquisition of a 100% equity interest in Qingdao Tianxun Electric Co., Ltd. (“Qingdao Tianxun”), one of IMM’s largest suppliers of electric control systems and related components for roadheaders and shearers. The strategic acquisition has enabled the Company to increase its shareholder value, improve gross margin and enhance operational efficiency, further strengthen the Company’s ability to provide integrated longwall systems, develop new products such as continuous miners, increase aftermarket sales, gain access to new customers, and also increase international sales.

Establishment of Joint Venture

On 8 December 2010, the Company (through its wholly owned subsidiary, Jiamusi Machinery) entered into an agreement with Shanxi Coal Transportation and Sales Group Co., Ltd. (through its wholly owned subsidiary) to establish a joint venture company, Shanxi Meijia Mining Machinery Company Limited. IMM holds 49% of the equity of Shanxi Meijia, which is principally engaged in the production, sale and marketing of roadheaders and other mining machinery.

Entrance into International Markets

IMM secured a number of new international orders in 2010. On 8 November, the Company shipped its first roadheader to Russia, representing the first significant step into international markets. Other orders will be shipped to India and Australia in the coming year.

New Product Introductions

IMM continued its legacy of developing products that suit the needs of our customers.  Highlights of the Company’s product development endeavors in 2010 include:

1. Roadheaders: EBZ135C for thin seam applications which is capable of handling separate coal and rock mining; and EBZ260B designed for applications with rock hardness of up to f10
2. Shearers: MG180/420-BWD that provides maximum under-body clearance in a thin seam application for a wide range of slopes; and MG2×40/120-TBW that adapts to either a single or double cutting drum suiting the user’s needs
3. Armoured-face conveyors and related products: SGZ1000/1400 was developed for one of its strategic customers which is a breakthrough for improving mining efficiency
4. Electric control systems: the development of the 1140V high voltage inverter improves the efficiency and reliability of thin seam shearers by enhancing the electrical haulage on machines

Mr. Kee-Kwan Allen Chan, CEO of IMM, said, “2010 was a remarkable year for IMM as the Company’s financial performance was taken to a higher level. Our track record proves our strong execution ability as well as our operational excellence. We have every confidence that IMM will benefit from the 'Twelfth Five-Year Plan' that has outlined the roadmap for the future development of the coal mining industry in China. It calls for the continued consolidation of coal mines and improved mechanization in the next five years. China’s coal mines will become bigger, safer and more efficient. This will not only assure the continued demand for coal mining equipment but will also ultimately benefit our customers. Going forward we will continue to stay focused on our strategic priority of providing the best integrated longwall systems to our customers, through which we endeavor to generate greater value for our shareholders.”

About International Mining Machinery Holdings Limited (IMM)

International Mining Machinery Holdings Limited is a leading designer and manufacturer of underground longwall coal mining equipment in China. Its products include roadheaders, shearers, armoured-face conveyors and related products, and electric control systems. Its end customers include all of the 50 largest coal producers in China, which collectively accounted for approximately 60% of the total coal production in China. On 27 August 2010, IMM completed the acquisition of 100% of the equity interests in Qingdao Tianxun Electric Co., Ltd. to enhance IMM’s competitiveness and become a leading provider of a complete longwall system solution in China. On 8 December 2010, IMM entered into an agreement with Shanxi Coal Transportation and Sales Group Co., Ltd. to establish a joint venture to meet the enormous demand for coal mining machinery in the rapidly consolidating coal mining market in Shanxi.

The Company has been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 10 February 2010 (stock code: 1683). On 6 September 2010, IMM became a constituent stock for the Hang Seng Composite Index and its sub-indexes, namely the Hang Seng Composite Industry Index – Industrial Goods and Hang Seng Composite SmallCap Index.

To learn more about the Company, please visit the Company’s website at:

http://www.immchina.com

For further enquiries, please contact Hill and Knowlton Asia Ltd.