China Metal Resources Utilization (Stock Code: 1636) Announces 2019 Unaudited Annual Results

HONG KONG,March 30,2020 -- China Metal Resources Utilization Limited ("CMRU" or "the Company") (Stock Code: 1636.HK),announced its unaudited annual results for the year ended 31 December 2019 (the ''year"). Due to the outbreak of the novel Coronavirus ("COVID-19") epidemic,CMRU's auditors are unable to conduct field works in the PRC,and the financial staff of the major subsidiaries of CMRU in the PRC,particularly in Hebei Province,was restricted from resuming work for smooth communication,the Company currently cannot complete some of the financial reporting and audit works. In order to keep the Shareholders and the public informed of the CMRU's business operations and financial positions,the board of directors of the Company has decided to publish the unaudited annual results announcement of CMRU for the year ended 31 December 2019 before the end of March 2020.

Annual Results Highlights

Revenue increased 16.3% to approximately RMB24.0 billion

Profit attributable to the owners of the Company for the year increased 272.7% to approximatelyRMB75.0 million

Earnings per share amounted to RMB0.03,as compared to RMB0.01 for last year

Current ratio of 1.3 as at 31 December 2019,as compared to 1.3 as at 31 December 2018

Revenue from trading of electrolytic copper increased 23.6%;revenue from recycled copper products increased 5.8%; sales of power transmission and distribution cables increased 17.2%

Financial Summary

For the year ended 31 December (RMB'000)

2019

(Unaudited)

2018

(Audited)

Change

Revenue

24,012,653

20,642,565

+16.3%

Gross loss

(257,941)

(234,264)

N/A

Profit for the year attributable to owners of the Company

75,005

20,123

+272.7%

Earnings per share

RMB0.03

RMB0.01

N/A

Gross loss margin

(1.1%)

(1.1%)

N/A

Net profit margin

0.3%

0.1%

N/A

In 2019,the PRC's GDP grew at 6.1% including 6.0% for Q4 2019,such growth rates,though slowing,were still within a reasonable range. The PRC still recorded an increase in the demand for copper products across the country. During the year,the Company's revenue amounted to approximately RMB24.0 billion (FY2018: approximately RMB20.6 billion),representing an increase of 16.3% compared to last year. The increase in sales volume was principally from the increase in trading of electrolytic copper and sales of recycled copper products,which are mainly contributed from the commencement of operations of subsidiary in Henan Kaifeng and expansion of operations in 2019. The Company's gross loss was approximately RMB257.9 million (FY2018: approximately RMB234.3 million). Besides,profit for the year was approximately RM75.0 million (FY2018: approximately RMB20.1 million),representing an increase of 272.7%. The increase was mainly due to the increase in government grants and subsidies and VAT refunds under Comprehensive Utilisation of Resources Policy,and increase in changes in fair value of contingent consideration liabilities.. Earnings per share amounted to RMB0.03 (FY2018: RMB0.01).

Other income and gain amounted to approximately RMB637.4 million (FY2018: approximately RMB491.4 million),representing an increase of 29.7% compared to last year. The increase were primarily attributable to the increases in government subsidies and grants and VAT refunds under Comprehensive Utilisation of Resources Policy,and increase in changes in fair value of contingent consideration liabilities. Besides,the improvement in the liquidity of the customers has resulted in an overall improvement in the trade receivable ageing and consequently the provision for bad debts ratio was adjusted downwards accordingly.

During the year,the sales volume of electrolytic copper increased 28.9% to 397,327metric tons (FY2018: 308,242 metric tons),with a decrease of 4.1% in average selling price to RMB42,071 per ton (FY2018: RMB43,860 per ton). For the year ended 31 December 2019,revenue from trading of electrolytic copper amounted to approximately RMB16.7 billion (FY2018: approximately RMB13.5 billion),representing an increase of 23.6% compared to last year.

The sales volume of recycled copper products increased 9.3% to 171,228 metric tons during the year (FY2018: 156,589 metric tons),with a decrease of 3.3% in average selling price to RMB41,954 per ton (FY2018: RMB43,364 per ton). For the year ended 31 December 2019,revenue from recycled copper products amounted to approximately RMB7.2 billion (FY2018: approximately RMB6.8 billion),representing an increase of 5.8% compared to last year.

Sales of power transmission and distribution cables amounted to approximately RMB32.0 million (FY2018: approximately RMB27.3 million),representing an increase of 17.2% compared to last year.

CMRU expects the operating environment to be challenging in the coming year. From January 2020,the COVID-19 outbreak began in the PRC. The Chinese government implement various stringent measures to fight against the spread of the virus. As a result,the PRC's manufacturing and services sector plunged to record lows in February and the PRC's exports fell 17.2 percent in January and February. It is widely expected that there will be a drop in the PRC's first quarter GDP,the first contraction since the PRC began reporting quarterly data in 1992. In order to further support the economic growth,the Chinese government encouraged banks to lend more to non-state-owned enterprises,launched new tax cuts and accelerated infrastructure investments. CMRU has put in place contingency measures to reduce the impact from this outbreak.

Mr. Yu Jianqiu,Chairman of the Company,concluded: "The outbreak of COVID-19 has created unprecedented risks and challenges to the global economy. We will be looking to conserve our financial strength and maintain a stable business operation,so that we will be able to cope with possible headwinds as well as being able to take advantage of future opportunities if and when they arise to help grow our business and enhance our shareholder value."

Following the completion of the auditing process,the Company will issue further announcement(s) in relation to (i) the audited results for the year ended 31 December 2019 as agreed by the Company's auditors and the material differences (if any) as compared with the unaudited annual results contained herein,(ii) the proposed date on which the forthcoming annual general meeting will be held,and (iii) the period during which the register of members holding ordinary shares will be closed in order to ascertain shareholders' eligibility to attend and vote at the said meeting (and the proposed arrangements relating to dividend payment,if any). In addition,the Company will issue further announcement as and when necessary if there are other material developments in the completion of the auditing process.

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.