Leoch International Announces 2011 Interim Results

Profit Attribute to Shareholders Surged 43.7% to RMB182 Million 

Grasped Market Opportunities of Rapid Growing Lead-acid Battery

Strengthened Capabilities in Production and Sale of a Variety of Lead-acid Batteries

Enhanced Our Advantages and the Leading Position in the Market

HONG KONG, Aug. 24, 2011 /PRNewswire-Asia/ --

Financial Highlights (For the six months ended 30 June)

Leoch International Technology Limited ("Leoch International" or the "Group", Stock code: 842), a leading manufacturer and developer of lead-acid batteries in China, announced its unaudited interim results for the six months ended 30 June 2011 ("the period under review"). Revenue and profit attributable to shareholders were RMB1.55 billion and RMB182.48 million respectively during the period under review, which increased 63.9% and 43.7% year on year.

Gross profit of the Group increased 47.5% from RMB244.86 million as at 30 June 2010 to RMB 361.18 million as at 30 June 2011. The overall gross profit margin was 23.3% as at 30 June 2011.

During the period under review, the Group obtained significant growth in the sales of reserve power batteries, SLI batteries and motive power batteries. The significant growth in the Group's sales of reserve power batteries during the period under review was mainly attributable to the contract orders of lead acid batteries from more major worldwide UPS manufacturers. Meanwhile, sales of renewable energy batteries was increased significantly as a result of substantial growth in solar and wind energy power generation, thereby boosting the related demand. The growth in sales of SLI batteries was mainly benefited from the fact that quality and value of the Group's products have been recognized by domestic and foreign manufacturers and distributors of automobiles and motorcycles. Moreover, the Group also enhanced production of SLI batteries to meet increasing market demand.

The large growth in sales of motive power batteries was mainly due to the promotion of new environment-friendly vehicles by governments of different countries, resulting in a substantial increase in demand for these motive power batteries. The Group also strengthened the production of batteries for electronic bicycles, forklifts and golf cars.

During the period under review, the Group has sales representative offices and professional sales teams in 32 major provinces and municipalities nationwide. Sales network covered more than 100 countries and regions worldwide to provide services to customers all over the world. Currently, the Group has over 400 sales personnel and after-sales personnel and has established relationships coordination sites with distributors in 16 countries.

The Group always pays much attention to invest in research and development. The Group has two research and development centers equipped with advanced equipments and over 400 researchers and technicians in Zhaoqing and Jiangsu. As at 30 June 2011, the Group has registered 56 patents in Mainland China and one patent in Hong Kong and other 270 proprietary technologies are under application for patent registration.

During the period under review, the Group had five wholly owned production bases in China and one jointly venture production base in Malaysia, with a total area of 870,000 square meters and 70 production lines. The annual production capacity was approximately 7.5 million KVAh. With the accelerated modernization of China, utilization of various electric equipment and power consumption increased, whilst the demand for batteries as necessary parts of various electric equipments will increase substantially. Lead acid batteries are considered irreplaceable in the foreseeable future, due to its high cycling rate, low production cost and safety reliability. Looking forward, the Group, therefore, anticipates that in the case of industry upgrade in China and foreign industry shift, rapid modernization and urbanization of China economy, industry consolidation of battery enterprises in China and more extensive application of new energies, the lead-acid batteries market in China will enjoy continuous increase. At a result, lead-acid batteries will continue to grow significantly in three sectors, namely reserve power batteries, SLI batteries and motive power batteries. In order to grasp these market opportunities, the Group has the following strategic plans for the three sectors of lead-acid batteries:

Mr. Dong Li, Chairman of the Company said, "2011 represents the first year after the Group's listing on The Stock Exchange of Hong Kong successfully. After obtaining support from capital market, the Group grasped market opportunities of lead-acid battery to grow rapidly. The Group has become a leading manufacturer and developer of lead-acid batteries in China, including all the segmentation application fields of lead-acid batteries, namely reserve power batteries, SLI batteries and motive power batteries. Leveraging on the leading position in the market, the Group will continue to strengthen capabilities in production and sale of a variety of lead-acid batteries, in order to bring better return to its shareholders."

About Leoch International Holdings Limited

Leoch International is principally engaged in the manufacturing of high quality lead-acid battery used as reserve power batteries, starting, lighting and ignition ("SLI") batteries and motive power batteries, ranging in capacity from 0.251Ah to 4,050Ah. The Company has an enormous production capacity. As of 30 June 2011, it operated five wholly owned production bases in the PRC and one joint venture production base in Malaysia with a total of 70 production lines and an aggregate annual installed production capacity of approximately 7.5 million KVAh. Leoch International is a leading manufacturer and developer of lead-acid batteries in China. According to Asia Battery Association, the Company was the largest lead-acid battery exporter in China in terms of export revenue in 2009. According to the financial data announced by listing companies in 2010, the Company is the largest reserve power battery manufacture in China. The customers of Leoch International come from various industries across the China and around the world, including telecommunications, UPS, renewable energy storage, automobiles, motorcycles and other vehicles and other industrial and consumer products. The Company serves well-known corporations like China Mobile Communication Co., Ltd, China United Network Communications Group Co. Ltd ("China Unicom", China Telecom Corp. and ZTE Corp. as well as BMW, Jaguar Cars Ltd, Mattel Inc., Haojue and PEPBOYS.

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