(Hong Kong, 22 August 2011) Chaowei Power Holdings Limited ("Chaowei Power" or the "Group", stock code: 951), a leading electric bike motive battery manufacturer in China, announced its naudited interim results for the six months ended 30 June 2011.
The Group's revenue for the period under review amounted to RMB1,939,172,000, representing an ncrease of 34.3% compared to RMB1,443,694,000 for the same period in 2010. The increase was rimarily attributable to the growth of sales volume of lead-acid motive batteries and an increase in he average selling price per unit of battery. The gross profit for the period amounted to MB585,571,000, representing an increase of 52.4%. Gross profit margin increased from 26.6% to 0.2% primarily because of the increase in average selling price of the products. The profit ttributable to the owners of the Company rose by 18.8% to RMB141.9 million, and the basic arnings per share was RMB 0.14, decreased by 12.5% from last year's because the number of hares issued upon listing was excluded from last year's calculation.
Driven by the favorable business environment, the Group's sales in the first half of 2011 increased by 4.3%. Though there was slight increase in lead price, the Group managed to raise the average elling price of products by 13%, keeping the Group's gross profit margin at a healthy level.
In view of the ever growing market demand for electric bikes and the shortage supply of lead-acid otive batteries because of industry consolidation after the government further tightened regulatory easures in the first half of the year, the Group has endeavored to continuously enhance the roduction capacity. During the review period, the Group's new production facilities in Henan rovince and Anhui Province were in full operation. The construction of a new production facility in ingyang County approved by the Broad last October has proceeded smoothly and will commence roduction in the third quarter of 2011. The Group's new wholly-owned subsidiary, Jiangxi Xinwei ower Technology Co., Ltd., entered into an agreement with the Shanggao County government to onstruct a new production facility, and the first phase is scheduled to commence production in eptember 2011 and expected to be put in full operation in first half of 2012. Moreover, the Group ompleted the acquisition of Anhui Yongheng Power Technology Co., Ltd. in June 2011. It is xpected that the annual production capacity of Anhui Yongheng will increase gradually from the xisting approximately 1 million units of lead-acid motive batteries to approximately 9 million units of ead-acid batteries. The Group considers this acquisition as a more cost effective and time efficient ay to expand the production base in Anhui province. In addition, Shandong Chaowei has resumed ts productions since May 2011, and the Group looks forward to restoring its production volume to pproximately 6 million units in 2011.
In recent years, the PRC's environmental authorities have strengthened their inspection of lead-acid attery manufacturers and strictly monitored against any non-compliance of enterprises. Chaowei ower has adopted cutting-edge production technology and environment friendly production ethods in order to maintain its product quality and to minimize the impact of battery production on he environment. As a leading enterprise in the lead-acid battery industry, the Group has benefited ully from the recent industry consolidation.
There is a growing concern over pollution prevention efforts of lead-acid battery and the government s stepping up its efforts in industry monitoring. A list setting out lead-acid storage battery anufacturers that were ordered to shut down due to substandard product quality was released on 2 ugust 2011. Among 1,930 lead-acid battery manufacturers, 30% were ordered to close down and 3% were required to temporarily suspend production. Only approximately 13% were allowed to aintain their production. As a result, the production capacity of the lead-acid batteries industry has een reduced significantly starting from the second quarter of 2011. In light of the sustaining strong arket demand, the increasing lead-acid battery shortage would drive up the selling price. In the ong run, well-established lead-acid battery manufacturers as Chaowei Power will benefit from it hile enjoying favorable business opportunities arising from market excess demand and industry onsolidation. The Group will strive to bring large and sustainable returns to the shareholders.