China Energine (HKEx: 1185) Announces 2014 Annual Results

HONG KONG, March 24, 2015 /PRNewswire/ --

Fiscal 2014 Highlights

• Turnover increased by 103.1% to HK$2.7 billion, net profit increased by 132.9% to HK$91.0 million
• Board of Directors recommended a final dividend of HK0.7 cent
• Sales and gross profit margin of the Group's wind energy related products increased by 111% and 8.7pps respectively, soared the industry ranking to 11th
• Sale of newly launched energy storage and related products reached HK$175.1 million
• Major breakthroughs in promoting electric vehicle market, in particular the market of electric buses
• Rapid growth in 2015 and beyond expected as the Group is to benefit from the state policies during the "Thirteenth-Five" period

China Energine International (Holdings) Limited ("China Energine", "the Company" or "the Group", HKEx: 1185) today announced its 2014 annual results for the 12 months ended 31 December 2014 (the "Year").

During the year, the Group recorded a turnover of HK$2.7 billion (2013: HK$1.3 billion), representing an increase of 103.1%; the profit attributable to owners of the Company was amounted to HK$91.0 million (2013: HK$39.0 million), representing 132.9% increase. The turnover for the year comprised sale of wind energy related products of HK$2,398.9 million, sale of electricity generated from wind farm of HK$25.5 million, sale of newly launched energy storage and related products of HK$175.1 million, sale of rare-earth permanent magnet motor products of HK$45.9 million and sales of HK$54.6 million related to telecommunication business. The increase in turnover was mainly due to the 111% year-on-year increase in sales of the Group's wind energy related products, whereas the increase in profit for the year was mainly due to the increase in sales of the Group's wind energy related products and the rise of gross profit margin relating to wind energy related products by 8.7pps. The Board of Directors recommended a final dividend of HK0.7 cent (2013: HKNil cent) per share.

Industry ranking soared with sales of the wind energy related products doubled and gross margin increased

China Energine's growth momentum in sales and profit came from wind energy related products. As the Group capitalised on its products' leading edge and achieved cost control by adopting the strategy of technology enhancement and batch production through research and development, thereby achieving high supply chain performance and enhanced cost effectiveness. Through Inner Mongolia Wind Turbine General Assembling Plant, and Gansu Wind Turbine General Assembling Plant, the Group realized mass production of a number of self-developed models (especially 1.5MW excitation magnetic directdrive wind turbine, 2MW permanent magnet directdrive wind turbine and 2MW excitation magnetic directdrive wind turbine), and adopted the strategy of establishing good relationship with several provincial and autonomous regions' governments to gain more production orders for wind turbines, thereby increasing our market share. At present, the Group has considerable wind energy resources in various major wind power bases planned by the State, effective pushing sales of wind turbines and bringing in promising income to the Group continually. In terms of customers, the Group has established more stable and secure business relationship with large power companies such as Guodian, Huadian and Datang, all of which have become our key customers.

In 2014, the Group soared the industry ranking from 21st in 2013 to 11th, creating new high record by new installations of wind turbines totalling 708,500KW. In 2014, the Group completed the assembling, commissioning and deliveries of 2MW excitation magnetic wind turbines in the total amount of 195 sets to Mahuangtan Project in Yumen City in Gansu, Xiapu Project in Ningde City in Fujian, Jingyuan Project in Gansu and Wuwei Hongshagang Project in Gansu in closing the sales of them. In addition, a batch production of 172 sets of 1.5MW wind turbines was completed and they were delivered in closing the sales of them. Meanwhile, the Group made deliveries of 103 units of 3MW wind turbine blades and 403 units of 1.5MW wind turbine blades and closed the sales of them.

In terms of wind farm operations, the Group operated the CASC Long Yuan (Benxi) wind farm of Liaoning Benxi; invested and constructed three wind farms including the Jilin Tongyu wind farm of Jilin Longyuan, the Jiangsu Rudong wind farm of Jiangsu Longyuan, and the Datang Wanyuan Xinghe wind farm of Inner Mongolia Xinghe. In addition, Energine Min Jian New Energy Investment Co., Ltd., the Group's associated company, formally engaging in offshore and land wind power projects in eastern Fujian through its subsidiary, Yingkou Wind Power Generation Co., Ltd., secured market orders for the Group for the purchase of 2MW directdrive wind turbine models produced by the Group.

Nurturing new core major businesses in graphene materials, lithium battery of high storage capacity and wind and solar power storage integration products

Whilst maintaining the leading position in wind energy technology, China Energine has been actively nurturing a new core major business from the research and development of a series of wind and solar energy storage products and a series of distributed energy storage system products. In 2014, the turnover attributable to the Group's newly launched sale of energy storage and related products reached HK$175.1 million.

In 2012, the Group initiated the research and development on graphene materials and lithium battery of high storage capacity. Cooperative research and development agreements were signed with international and domestic renowned experts and teams in order to achieve mass production of high quality graphene by leveraging on the graphene extraction technology mastered by them and conducted research and development on new grapheme based cathode material for batteries and high capacity lithium battery in order to launch a series of energy storage products with an integrated system based on high capacity lithium batteries. In 2013, international renowned experts were invited by the Group to join the Energy Storage Technology Research and Development Centre ("R&D Centre") and effectively commenced the research and development on graphene and energy storage system. Material breakthroughs have been achieved in a number of technologies by the R&D Centre. In 2014, the R&D Centre possesses a daily production capacity of 5 kg graphene; realizes the pilot production of anode material; and small batch production of electrolyte following passing its pilot production line. Materials can be certified promptly on the battery production line, whereas the electrolyte enhances the performance of materials in the battery.

Meanwhile, a lithium iron phosphate battery for application in wind turbines of variable pitch has been developed and applied to 2MW excitation magnetic wind turbines successfully. Another dynamic lithium iron phosphate battery of excellent performance will also be applied to electric cars and electric bicycles, developing a large-capacity energy storage system. In addition, another new type of street lighting system with complementary wind energy and solar energy based on a lithium battery energy storage system has been developed, which may extend to unmanned communication base stations, data transmission by high voltage wire towers, boundary outposts, islands, remote areas with no electricity, etc. and may even connect to power grid for electricity generation. The Group reached a strategic cooperation agreement with Wuwei City in connection with wind and solar power storage integration projects, which expressly put forward a policy of "mutual guarantee and joint development", stipulating that investors of non-local enterprises must guarantee purchase of no less than 60% of the wind turbine equipment from the Group for the sake of obtaining the resources relating to wind farms and photovoltaic power stations.

Exploitation of electric vehicle market achieved significant breakthroughs

The key technologies in electric vehicles include vehicle, motor, battery, control and driving system as well as charging point system, where main technical bottlenecks that restrict the development of electric vehicles are the performances of batteries and vehicle control system, which, however, are the advantages and features of China Energine.

As the performance of high-capacity lithium batteries launched by the technical team of the Company, the controlling shareholder, China Academy of Launch Vehicle Technology (CALT), and an international expert reaches 160 Wh/kg, exceeding market level of 130 Wh/kg, and the "four in one" vehicle control system launched by us could place motor driver, vehicle controller, high voltage distribution box and DC power switching device in one control box, the batteries feature comprehensive functions and high level of integration. The electric buses installed with the Group's batteries and control systems are capable of running over 300 km mileage per charge. Exactly thanks to this edge, the Group has made major breakthroughs in promoting electric vehicle market, in particular the market of electric buses and proven track record.

New materials and automotive component parts businesses

The China Energine branded rare-earth permanent magnet gearless traction machines and its driving control system researched and developed by the company itself had filled the technological gap of the domestic gearless elevator sector. In addition, Wuxi CASC Energine Xindali Electricity Co., Ltd. ("Wuxi Generator Plant"), the Group's associated company, is engaged in batch production of 900KW, 1.5MW and 2MW generators. The Group is equipped with the internal capacity to supply core parts and components of wind turbines, including blades and generators, thereby reducing its reliance on upstream suppliers of the wind turbine supply chain for purchasing generators and controlling the supply risk of the wind turbine supply chain and production cost. In 2014, the Group entered into a contract of exporting 42 units of 900KW wind tribune generators to Netherlands.

In the sector of automotive component parts, Beijing Delphi Wan Yuan Engine Management Systems Co., Ltd, a joint venture, is a leading supplier in the domestic automotive electronic fuel injection market with a stable market share, ranking the second nationwide and supplies to almost all major domestic automobile manufacturers. As for export sales, its products are sold to automobile manufacturers in Europe and North America.

Rapid growth in 2015 and beyond with strong supports from state policies

Currently, serious air pollution has been spread as a national issue. The National Energy Administration stated that¸ during the "Thirteenth-Five" period, the wind power is expected to gradually change the status of "alternative energy" and rises to pose as the China main energy structural body in the future, providing an assurance on the sustainable and healthy development of wind power. China government has also increased the support for development of clean energy as well as policy support thereon. The supports from state policies will enable the Group to expand market share in reliance on our proven record of stable orders received, thereby ensuring a rapid growth in the Group's operational results in 2015 and beyond.

To seize this opportunity for rapid growth, in December 2014, the Group proceeded a placing of the existing shares and subscription for new shares of 400 million shares, with the placing price of HK$ 0.75 per share, obtaining a net fund of approximately HK$291 million, which is mainly used for general working capital and to finance projects on energy storage including the development of wind and solar power storage integration and that on electric vehicle, thereby improving the Group's capital structure.

Mr. Han Shuwang, Chairman of China Energine, said, "Given that the Group has strong technical advantages in the application of energy storage system and electric vehicle technology and operates in the clean energy industry as staunchly encouraged by the supports from state policies,the development of new technology and exploitation of new market are focusing on the areas of wind and solar power storage integration as well as electric vehicles intensively. The Group will strive to develop wind and solar power storage integration and electric vehicles rapidly into new growth points and core businesses of the Group in 2015 on the basis of established market results by hinging on tremendous technical edges obtained in the said sectors, grasping the opportunity of staunch assistances and supports from China policies and devoting greater efforts in market exploitation with the aim of re-addition of momentum in the course of the rapid growth of the Group's operational results."

About China Energine International (Holdings) Limited

China Energine International (Holdings) Limited is one of a few high-end and high-growth new energy enterprises that has top technology research and development capability and resources whilst succeeding in their commercialisation. China Energine focuses on the development of businesses which are strongly supported by the state, comprising manufacture of wind turbines, development of wind farm, distributed energy, wind-solar energy storage integration and graphene energy storage. The Group has capabilities for the research and development and production of wind turbines as well as the design, construction and operation of wind farm across the wind power industry chain. The Group has hitherto accumulated a history of over 15 years of experiences in self-research, development and production in several new energy-saving and environmental conservation businesses, such as self-research and development of excitation magnetic directdrive gearless wind turbine, graphene energy storage battery and power management system, all of which have entered industrial operations successfully.  Over the years, the brand of Aerospace has great influence over various regions across the nation. Meanwhile, since Aerospace has been developing the wind energy industry for a long period of time, a very good development relationship has been established with various provinces and good partnership relationship is also maintained with the top five power companies.

The press release is distributed by MP Finance on behalf of China Energine International (Holdings) Limited.

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