China Metal Resources Utilization (Stock Code: 1636) Announces 2018 Annual Results

HONG KONG,March 29,2019 --

Annual Highlights

Revenue increased sharply by 50.2% to approximately RMB20.6 billion

A 33.2% increase in revenue from trading of electrolytic copper; a 92.2% increase in revenue from recycled copper products; a 102.2% increase in revenue from sales of power transmission and distribution cables

Adjusted EBITDA for the year is amounted to approximately RMB172 million

Several fund raising activities during the year,with a total amount of approximately HK$364.7 million; few acquisitions were undertaken including production facilities in Sichuan,Hubei and Henan

Financial Summary

For the year ended 31 December (RMB'000)

2018

2017

Change

Revenue

20,642,565

13,741,862

+50.2%

Gross profit/(loss)

(234,264)

123,607

N/A

Profit attributable to the equity shareholdersof the Company

20,123

184,583

-89.1%

AdjustedEBITDA for the year

172,045

322,146

-46.6%

Basic earnings per share

RMB0.01

RMB0.08

N/A

Gross profit/(loss)margin

(1.1%)

0.9%

N/A

Net profit margin

0.1%

1.3%

N/A

China Metal Resources Utilization Limited ("China Metal Resources" or "the Company") (Stock Code: 1636),announced its annual results for the year ended 31 December 2018 ("the year").During the year,the revenue of the Company significantly increased by 50.2% to approximately RMB20.6 billion (FY2017: approximately RMB13.7 billion). The gross loss of the Company is amounted to approximately RMB234.3 million (FY2017: profit of approximately RMB123.6 million). The deterioration of gross profit margin was mainly due to the rapidly drop in copper price in the second and third quarters of 2018. Besides,during the year,the profit attributable to the equity shareholders of the Company is amounted to approximately RMB20.1 million. The adjustedEBITDA for the year is amounted to approximatelyRMB172.0 million. The basic earnings per share is RMB0.01.

The significant increase in revenue by 50.2% was principally due to the increase in sales volume from the increase intrading of electrolytic copper,which are contributed from the commencement of new operations in Liangshanzhou and contribution from the newly acquired subsidiaries. During the year,the sales volume of electrolytic copper is increased by 30.0% to 308,241.9 metric tons (FY2017: 237,190.5metric tons),with an increase of 2.5% in average selling price toRMB43,860 per ton(FY2017: RMB42,805 per ton). For the year ended 31 December 2018,revenue from trading of electrolytic copper amounted to approximately RMB13.5 billion for the year (FY2017: approximately RMB10.2 billion),representing an increase of 33.2% compared to the same period last year.

During the year,the sales volume of recycled copper products is increased by 89.0% to 156,589 metric tons (FY2017: 82,866 metric tons),with an increase of 1.7% in average selling price toRMB43,364 per ton(FY2017: RMB42,628 per ton). For the year ended 31 December 2018,revenue from trading of recycled copper products amounted to approximately RMB6.8 billion for the year (FY2017: approximately RMB3.5 billion),representing a significant increase of 92.2% compared to the same period last year.

Moreover,for the year ended 31 December 2018,revenue from sales of power transmission and distribution cables amounted to approximately RMB27.3 million (FY2017: approximately RMB13.5 million),representing a significant increase of 102.2% compared to the same period last year.

In order to take advantage of the expected recovery of the industrial metal market,the Company underwent an issuance of 76.0 million new ordinary shares for HK$364.7 million in October 2018. In order to grasp the favorable opportunities to expand our scale,the Company also completed few acquisitions during the year,namely,Mianyang Zhaofeng Copper Co.,Ltd.,Hubei Rongsheng Copper Co.,Ltd. and Chengxin Copper Copper Co.,which have production facilities in Sichuan,Hubei and Henan respectively.

Although the economy in China is decelerating,the Chinese government is rolling out further stimulus including easing monetary policy,boosting bank lending to non-state-owned enterprises,launching additional tax cuts,and increasing infrastructure spending. With the expected supporting stimulus,the demand for copper products across the country is expected to increase. Copper price in China has increased by approximately 3.8% in the first two months of 2019,a possible signal of recovery in commodity market.

Mr. Yu Jianqiu,Chairman of the Company,concluded,"Although 2018 was a difficult year in macroeconomic environment,the Company still generated a significant increase in sales revenue. The Company have become more optimistic and will be looking to increase our financial strength,so that we can take full advantage of future opportunities as well as being able to cope with possible headwinds. At the same time,we shall also continue to seek suitable acquisition opportunities to help grow our business and enhance our shareholder value."

About China Metal Resources Utilization Limited

China Metal Resources Utilization Limited ("China Metal Resources" or "the Company") (Stock Code: 1636.HK) is a leading manufacturer in scrap copper industry. The Company has a fully integrated value chain with a production and service business model,with business consisting of scrap metal recycling,standard processing and metal deep processing products. By making use of the internet,the Company also provides a comprehensive platform combined with recycle metal information,warehouse logistics and financial services,providing services including recycled metal production,sale and related services. China Metal Resources is mainly involved in the sale of deep processed metal products and scrap metal value chain integrated services,in which deep processing metal includes the processing of recycled scrap copper,scrap aluminium,turning them into different copper and aluminium products such as copper rod,copper bar,copper wire as well as cable,wire and network cable; while scrap metal value chain integrated services include standard metal recovery processing,warehouse logistics,transaction settlement and financial services.