Pingtan Marine Enterprise Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2019

FUZHOU,China,March 17,2020 -- Pingtan Marine Enterprise Ltd. (Nasdaq: PME) ("Pingtan" or the "Company"),a global fishing company based in the People's Republic of China (PRC),today announced financial results for its fourth quarter and year ended December 31,2019.

Fourth Quarter 2019 Financial Highlights (all results are compared to prior year period)

Revenue was $34.6 million,compared to $25.1 million.

Gross profit was $8.3 million,compared to $9.1 million,and gross margin was 24.0%,compared to 36.2%.

Net loss attributable to owners of the Company was $1.0 million,or $(0.01) per basic and diluted share,compared to net loss attributable to owners of the Company of $3.0 million,or $(0.04) per basic and diluted share.

2019 Financial Highlights (all results are compared to prior year)

Revenue increased by 39.5% to $89.6 million from $64.3 million.

Gross profit was $25.2 million,compared to $31.0 million,and gross margin was 28.1%,compared to 48.3%.

Net income attributable to owners of the Company was $5.7 million,or $0.07 per basic and diluted share,compared to net income attributable to owners of the Company of $13.4 million,or $0.17 per basic and diluted share.

Management Comments

Mr. Xinrong Zhuo,Chairman and CEO of the Company,commented,"We are pleased with our operational performance in 2019 and are looking forward to building on that performance in 2020. Following the completion of the modification and rebuilding of 27 large-scale fishing vessels in 2018,in 2019,we completed the modification and rebuilding of another 32 large-scale fishery vessels,including 2 refrigerated transport vessels and 30 fishing vessels. As part of our efforts to expand our fishing fleet and catching capacity,at the end of 2019,we submitted an application to the Chinese government authorities to obtain permits to modify and rebuild 10 vessels. The rebuilt fishing vessels have increased our catch volume and sales volume,and our catch mix shows diversity.

The first quarter of 2020 is a difficult time for many companies,including Pingtan,that conduct their businesses in China due to the coronavirus outbreak. The Company has taken active precautionary measures and gradually resumed work in mid-February to reduce the impact of the pandemic on our production and operations. Although the pandemic has not yet disappeared completely,we remain optimistic about the production and operation activities for the upcoming quarters. Pingtan has been devoted to being a leading supplier of natural seafood and high-quality protein in the Chinese market."

Factors Affecting Pingtan's Results of Operation

Coronavirus Pandemic

In December 2019,a novel strain of coronavirus that causes respiratory illness,or COVID-19,surfaced in Wuhan,and began spreading at a high rate in January and February of 2020 and confirmed cases were reported in other parts of the world. In reaction to this outbreak,an increasing number of countries have imposed travel suspensions to and from China following the World Health Organization's "public health emergency of international concern" (PHEIC) announcement on January 30,2020. Since this outbreak,domestic business activities in China have been disrupted by a series of emergency quarantine measures taken by the government. As a result,the Company's business operations have slowed down and such slow down is expected to continue for at least the first quarter of 2020. The magnitude of this negative effect on the continuity of the Company's business operations in China remains uncertain. These uncertainties impede our ability to conduct our daily operations and could materially and adversely affect our business,financial condition and results of operations.

Indonesia's Moratorium on Fishing License Renewals

In early December 2014,the Indonesian government introduced a six-month moratorium on issuing new fishing licenses and renewals so that the country's Ministry of Maritime Affairs and Fisheries ("MMAF") could combat illegal fishing and rectify ocean fishing order. In February 2015,the Company ceased all fishing operations in Indonesia. In November 2015,the Indonesian government announced that the moratorium had concluded,but the MMAF has neither implemented new fishing policies nor resumed the license renewal process. The Company has been paying close attention to any new trends in the MMAF's fishing policy and has been actively exploring new locations to deploy our vessels.

As of December 31,2019,among the Company's 141 vessels,12 were located in the Bay of Bengal in India,69 were located in international waters,13 were located in the PRC,37 were located in the Arafura Sea in Indonesia,and the remaining 10 vessels were in the modification and rebuilding projects.

Pingtan's Revenue Break-down By PRC Provincial Division

Year Ended December 31,

2019

2018

2017

Fujian province

66

%

58

%

61

%

Shandong province

28

%

15

%

9

%

Zhejiang province

4

%

3

%

2

%

Guangdong province

1

%

24

%

28

%

Other areas

1

%

%

%

Total

100

%

100

%

100

%

2019Selected Financial Highlights

($ in millions,except share and per share) data)

Three Months ended

December 31,

Year Ended

December 31,

2019

2018

2019

2018

2017

Revenue

$34.6

$25.1

$89.6

$64.3

$63.2

Cost of Revenue

$26.3

$16.0

$64.4

$33.2

$41.1

Gross Profit

$8.3

$9.1

$25.2

$31.0

$22.1

Gross Margin

24.0%

36.2%

28.1%

48.3%

34.9%

Net (Loss) Income

$(1.1)

$(3.2)

$6.4

$14.8

$32.5

Basic and Diluted Weighted Average Shares Outstanding

79.1

79.1

79.1

79.1

79.1

EPS (in $)

$(0.01)

$(0.04)

$0.07

$0.17

$0.38

Balance Sheet Highlights

($ in millions,except for book value per share)

12/31/2019

12/31/2018

Cash and Cash Equivalents

$10.1

$2.0

Total Current Assets

$64.3

$15.5

Total Assets

$404.1

$247.0

Total Current Liabilities

$88.8

$73.1

Total Long-term Debt,net of current portion

$160.2

$22.3

Total Liabilities

$249.0

$95.4

Shareholders' Equity

$155.1

$151.6

Total Liabilities and Shareholders' Equity

$404.1

$247.0

Book Value Per Share (in $)

$1.96

$1.92

Consolidated Financial and Operating Review

Revenue

Revenue for the three months ended December 31,2019 was $34.6 million compared to $25.1 million for the same period of 2018.

For the year ended December 31,the Company's revenue was $89.6 million,increasing by 39.5% from $64.3 million for the year ended December 31,2018. The increase was mainly due to the total of 81 vessels that the Company put into operation in 2019,which led to increased sales volume and revenue.

Gross Margin

The Company's gross margin was 24.0% for the three months ended December 31,compared to 36.2% in the prior year period.

The Company's gross margin was 28.1% for the year ended December 31,compared to 48.3% in the same period of 2018. The decrease was primarily attributable to lower average unit sale price of our catches. Our fishing locations were mostly in international waters in 2019 and the catch mix varied from 2018. The catch species with the highest sales volume was sold at lower price,which led to a drop of average unit sale price by 27.9% for the year ended 2019.

Selling Expenses

For the three months ended December 31,selling expense was $0.82 million,compared to $0.44 million in the prior year period.

For the year ended December 31,total selling expenses was $2.72 million,compared to $1.62 million in the same period of 2018,an increase of 67.4%. The increase was primarily due to the increase in insurance as a result of more vessels being insured in 2019.

General & Administrative Expenses

For the three months ended December 31,general and administrative expense was $1.1 million,compared to $0.7 million in the prior year period.

For the year ended December 31,total general and administrative expense was $15.8 million,compared to $20.0 million in the same period of 2018,a decrease of 20.8%. The decrease was primarily due to the 18.2% decrease in impairment loss on dismantled and deregistered vessels and the 35.7% decrease in depreciation on non-operating vessels.

Net Income(Loss)

Net loss for the three months ended December 31,2019 was $1.1 million,compared to net loss of $3.2 million in the same period of 2018. The decrease in net loss was mainly due to a decrease of $4.3 million non-cash impairment loss from vessels in the fourth quarter of 2019,compared to the fourth quarter of 2018.

For the year ended December 31,net income was $6.4 million,compared to $14.8 million in the prior year period,a decrease of 56.9%. The Company recorded an impairment loss of $8.0 million and depreciation of $3.7 million on non-operating vessels,and the two non-cash items subtotaled $11.7 million of operating expenses.

Net Income (Loss) Attributable to Owners of the Company

Net loss attributable to owners of the Company for the three months ended December 31,2019 was $1.0 million,or $(0.04) per basic and diluted share,in the same period of 2018.

Net income attributable to owners of the Company for the year ended December 31,2019 was $5.7 million,or $ 0.17 per basic and diluted share,in the same period of 2018.

Conference Call Details

Pingtan also announced that it will discuss financial results in a conference call on Tuesday,2020 – 8:30 a.m. ET (March 17,2020 at 8:30 p.m. Beijing Time).

The dial-in numbers are:

Live Participant Dial-in (Toll Free): 877-407-0310

Live Participant Dial-in (International): 201-493-6786

To listen to the live webcast,please go to http://www.ptmarine.com and click on the conference call link at the top of the page or go to: https://78449.themediaframe.com/dataconf/productusers/pme/mediaframe/36296/indexl.html. This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.

About Pingtan

Pingtan is a global fishing company that engages in ocean fishing through its subsidiary,Fujian Provincial Pingtan County Ocean Fishing Group Co.,Ltd.,or Pingtan Fishing.

Business Risks and Forward-Looking Statements

This press release may contain forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934,as amended. Words such as "estimate," "project," "forecast," "plan," "believe," "may," "expect," "anticipate," "intend," "planned," "potential," "can," "expectation" and similar expressions,or the negative of those expressions,may identify forward-looking statements. Although forward-looking statements reflect the good faith judgment of our management,such statements can only be based on facts and factors currently known by us. Consequently,forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Risks include anticipated growth and growth strategies; need for additional capital and the availability of financing; locating or re-locating vessels,in foreign waters and related license requirements; our ability to successfully manage relationships with customers,distributors and other important relationships; actions taken by government regulators,such as the Indonesian moratorium; technological changes; competition; demand for our products and services; the deterioration of general economic conditions,whether internationally,nationally or in the local markets in which we operate; the impact of the current coronavirus (COVID-19) pandemic; legislative or regulatory changes that may adversely affect our business; operational,mechanical,climatic or other unanticipated issues that adversely affect the production capacity of the Company's fishing vessels and their ability to generate expected annual revenue and net income; and other risk factors contained in Pingtan's SEC filings available at www.sec.gov,including Pingtan's most recent Annual Report on Form 10-K,Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements,which speak only as of the date on which they are made. Pingtan undertakes no obligation to update or revise any forward-looking statements for any reason.

CONTACT:

LiMing Yung (Michael)

Chief Financial Officer

Pingtan Marine Enterprise Ltd.

Tel: +86 591 87271753

michaelyung@ptmarine.net

Maggie Li

Investor Relations Manager

Pingtan Marine Enterprise Ltd.

Tel: +86 591 8727 1753

mli@ptmarine.net

INVESTOR RELATIONS

PureRock Communications Limited

PTmarine@pure-rock.com

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

(IN U.S. DOLLARS)

For the threeMonthsEnded

December31,

2019

December31,

2018

REVENUE

$

34,554,907

$

25,080,185

COST OF REVENUE

26,262,019

16,004,403

GROSS PROFIT

8,292,888

9,075,782

OPERATING EXPENSES:

Selling

819,608

440,731

General and administrative

1,050,003

657,232

General and administrative-Depreciation

840,858

1,368,268

Subsidy

(1,151,713)

(54,883)

Impairment loss

5,405,297

9,715,058

Gain on fixed assets disposal

(223,807)

(23,164)

Total Operating Expenses

6,740,246

12,103,242

INCOME FROM OPERATIONS

1,552,642

(3,027,460)

OTHER INCOME (EXPENSE):

Interest income

754,184

2,362

Interest expenses

(3,494)

(291,432)

Loss from cost method investment

(28,158)

(5,741)

Loss on the interest sold

(86,603)

-

Loss on equity method investment

(8,831)

(71,209)

Foreign currency transaction gain

91,339

49,170

Other (expense) income

(219,035)

100,176

Total Other Expense,net

(2,648,598)

(216,674)

LOSS BEFORE INCOME TAXES

(1,095,956)

(3,244,134)

INCOME TAXES

-

-

NET LOSS

$

(1,956)

$

(3,134)

LESS: NET LOSS ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

(53,641)

(220,593)

NET LOSS ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

(1,042,315)

$

(3,023,541)

COMPREHENSIVE INCOME:

NET LOSS

(1,956)

(3,134)

OTHER COMPREHENSIVE INCOME (LOSS)

Unrealized foreign currency translation gain (loss)

205,474

(38,479)

TOTAL COMPREHENSIVE LOSS

$

(890,482)

$

(3,282,613)

LESS: COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

123,638

(223,668)

COMPREHENSIVE LOSS ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

(1,014,120)

$

(3,058,945)

NET LOSS PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPNAY

Basic and diluted earnings per share

$

(0.01)

$

(0.04)

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:

Basic and diluted

79,055,053

79,053

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(IN U.S. DOLLARS)

For the Years Ended December 31,

2019

2018

2017

REVENUE

$

89,622,156

$

64,256,088

$

63,209,687

COST OF REVENUE

64,396,571

33,239,582

41,126,898

GROSS PROFIT

25,225,585

31,016,506

22,082,789

OPERATING EXPENSES:

Selling

2,599

1,451

1,231,031

General and administrative

4,163,873

4,513,193

4,503,795

General and administrative - depreciation

3,726,061

5,791,557

5,609

Subsidy

(6,440,299)

(8,584,731)

(22,177,227)

Impairment loss

7,951,635

9,058

-

(Gain) loss on fixed assets disposal

(59,432)

2,105,960

195,375

Total Operating Expenses

12,057,437

15,488

(11,171,417)

INCOME FROM OPERATIONS

13,168,148

15,853,018

33,254,206

OTHER INCOME (EXPENSE):

Interest income

780,604

41,446

186,194

Interest expense

(6,310)

(1,210,974)

(2,403,213)

Foreign currency transaction (loss) gain

(298,304)

(157,852)

1,195,875

Gain from cost method investment

312,727

382,627

320,316

Loss on the interest sold

(86,603)

-

-

Loss on equity method investment

(486,803)

(192,746)

(33,246)

Other (expense) income

(954,394)

97,179

(1)

Total Other Expense

(6,788,083)

(1,040,320)

(734,075)

INCOME BEFORE INCOME TAXES

6,380,065

14,812,698

32,520,131

INCOME TAXES

-

-

-

NET INCOME

$

6,065

$

14,698

$

32,131

LESS: NET INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

698,041

1,415,397

2,860,438

NET INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

5,682,024

$

13,397,301

$

29,659,693

COMPREHENSIVE INCOME:

NET INCOME

6,131

OTHER COMPREHENSIVE INCOME (LOSS)

Unrealized foreign currency translation (loss) gain

(2,861,319)

(8,387,092)

7,760,460

COMPREHENSIVE INCOME

$

3,518,746

$

6,425,606

$

40,280,591

LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

469,583

744,463

3,473,736

COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

3,049,163

$

5,681,143

$

36,806,855

NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY

Basic and diluted

$

0.07

$

0.17

$

0.38

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:

Basic and diluted

79,053

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN U.S. DOLLARS)

December 31,

2019

2018

ASSETS

CURRENT ASSETS:

Cash

$

10,092,205

$

1,966,855

Accounts receivable,net of allowance for doubtful accounts

9,273,446

6,307,492

Due from related parties

12,477,777

-

Inventories,net of reserve for inventories

30,527,752

5,840,207

Prepaid expenses

1,354,129

644,824

Other receivables

613,384

698,450

Total Current Assets

64,338,693

15,457,828

OTHER ASSETS:

Cost method investment

3,010,235

3,059,797

Equity method investment

27,923,464

28,872,521

Prepayment for long-term assets

49,338

-

Right-of-use asset

438,254

-

Property,plant and equipment,net

259,377,729

199,571,425

Total Other Assets

339,790,020

231,743

Total Assets

$

404,128,713

$

246,961,571

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

7,766

$

30,642,125

Accounts payable - related parties

1,707,217

3,843

Short-term bank loans

10,034,116

5,085,139

Long-term bank loans - current portion

57,122,789

8,487,295

Accrued liabilities and other payables

11,428,018

6,548

Lease liability- current liability

375,922

-

Due to related parties

168,328

19,555,277

Total Current Liabilities

88,156

73,073,227

OTHER LIABILITIES:

Lease liability

32,203

-

Long-term bank loans - non-current portion

160,230,498

22,329,234

Total Liabilities

249,857

95,402,461

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

Equity attributable to owners of the company:

Ordinary shares ($0.001 par value; 125,000,000 shares authorized; 79,053 shares issued and outstanding at December 31,2019 and 2018)

79,055

79,055

Additional paid-in capital

81,599

81,599

Retained earnings

54,286,454

49,593,069

Statutory reserve

15,748,751

14,112

Accumulated other comprehensive loss

(16,908)

(13,448,047)

Total equity attributable to owners of the company

135,951

132,666,788

Non-controlling interest

19,361,905

18,892,322

Total Shareholders' Equity

155,077,856

151,559,110

Total Liabilities and Shareholders' Equity

$

404,571

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN U.S. DOLLARS)

For the Years Ended December 31,

2019

2018

2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

6,131

Adjustments to reconcile net income from operations to net cash provided by (used in) operating activities:

Depreciation

11,308,882

9,141,975

8,965,553

Increase (decrease) in allowance for doubtful accounts

8,050

(66,532)

(194,278)

Increase (decrease) in reserve for inventories

(142,370)

429,267

-

Loss on equity method investment

486,803

192,746

33,246

Loss on the interest sold

86,603

-

-

Loss (gain)on disposal of fixed assets

(59,992

195,376

Impairment loss of fishing vessels

7,943,585

9,058

-

Changes in operating assets and liabilities:

Accounts receivable

(3,110,730)

6,373,815

(765,708)

Inventories

(24,918,904)

(2,970,908)

5,607,279

Advances to suppliers

-

-

4,078,230

Prepaid expenses

(727,857)

(559,629)

(98,606)

Prepaid expenses - related parties

-

-

536,665

Other receivables

74,967

(450,948)

32,439,871

Other receivables - related party

-

-

1,487

Accounts payable

(22,443,999)

1,044,710

3,005,441

Accounts payable - related parties

(1,501,793)

1,351

(885,433)

Accrued liabilities and other payables

5,508

995,836

254,242

Accrued liabilities and other payables - related party

(1,290)

(36,918)

(18,606,716)

Due to related parties

(9,483,868)

11,369

(23,354)

NET CASH (USED IN) PROVIDED BYOPERATING ACTIVITIES

(30,573,780)

53,302,882

68,426

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property,plant and equipment

(118,468,793)

(60,930,363)

(49,416)

Prepayment made for long-term assets

(49,592,695)

-

-

Proceeds from disposal of property,plant and equipment

72,480

-

-

Proceeds from government grants for fishing vessels construction

35,524,824

5,223,804

6,600,906

Payments for equity method investment

-

-

(296,217)

NET CASH USED IN INVESTING ACTIVITIES

(132,464,184)

(55,706,559)

(43,727)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term bank loans

10,147,133

14,960,559

14,453,010

Repayments of short-term bank loans

(5,062,771)

(14,143)

(21,673,260)

Proceeds from long-term bank loans

208,483

5,478,766

-

Repayments of long-term bank loans

(18,880,916)

(5,893,554)

(17,773,038)

Advances from related parties

(10,046,010)

3,891,085

4,328,693

Loans issued to related parties

(12,618,318)

-

-

Payments made for dividend

-

(2,371,652)

(3,162,203)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

171,562,601

1,061

(23,826,798)

EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS

(399,287)

(899,256)

(962,492)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

8,125,350

(1,859,872)

94,409

CASH AND CASH EQUIVALENTS - beginning of year

1,855

3,727

3,732,318

CASH AND CASH EQUIVALENTS - end of year

$

10,855

$

3,727

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Interest

$

6,419,569

$

1,311,455

$

2,639,039

Income taxes

$

-

$

-

$

-

RECONCILIATION TO AMOUNTS ON CONSOLIDATED BALANCE SHEETS:

Cash and cash equivalents

10,205

1,855

2,540

Restricted cash

-

-

1,821,187

TOTAL CASH,CASH EQUIVALENTS AND RESTRICTED CASH

$

10,727

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Acquisition of property and equipment by decreasing prepayment for long-term assets

$

-

$

11,431,500

$

1,036,761

Property and equipment acquired on credit as payable

$

-

$

26,488,534

$

215,202