China Metal Resources Utilization (1636.HK) Announces 2020 Audited Annual Results

HONG KONG,April 9,2021 --China Metal Resources Utilization Limited ("CMRU" or "the Company") (Stock Code: 1636.HK),announced its audited annual results for the year ended 31 December 2020 (the ''year")

2020 Annual Results Highlights

Revenue decreased 30.5% to approximately RMB16.7 billion

Revenue from trading of electrolytic copper decreased 49.1%;revenue from recycled copper products increased 11.2%; sales of power transmission and distribution cables increased 2.4%

Impairment of goodwill amounted to approximately RMB277.9 million in 2020,as compared to RMB407.9 million in 2019

Loss attributable to the owners of the Company for the year increased 78.2% to approximatelyRMB387.0 million

Loss per share amounted to RMB0.15,as compared to RMB0.08 for last year

Current ratio of 1.2 as at 31 December 2020,as compared to 1.3 as at 31 December 2019

Financial Summary

For the year ended 31 December (RMB'000)

2020

2019

Change

Revenue

16,698,527

24,012,653

-30.5%

Gross profit / (Gross loss)

62,577

(257,941)

N/A

Loss for the year attributable to

owners of the Company

(387,249)

(217,336)

+78.2%

Loss per share

RMB(0.15)

RMB(0.08)

+87.5%

Gross profit / (Gross loss margin)

0.4%

(1.1%)

N/A

Net loss margin

(2.3%)

(0.9%)

N/A

The Coronavirus Disease 2019 (COVID-19) pneumonia epidemic has caused a major impact on the world economy in 2020,creating one of the biggest challenges after the Great Depression. The decline in industrial production across China has led to a significant reduction in the demand for basic raw materials,especially metal materials. During the year,the Company's revenue amounted to approximately RMB16.7 billion (FY2019: approximately RMB24.0 billion),representing a decrease of 30.5% compared to last year. The decrease in sales volume was principally from the decrease in trading of electrolytic copper,which was mainly due to the suspension of operation as a result of COVID-19. The Company's gross profit for the year was approximately RMB62.6 million (FY2019: gross loss of approximately RMB257.9 million). Loss for the year was approximately RMB387.2 million (FY2019: approximately RMB217.3million),representing an increase of 78.2%. The increase in loss is mainly attributable to the substantial increase in provision for doubtful debts amounting to RMB47.0 million and substantial decrease in VAT refunds,government grants and subsidies amounting to RMB283.5 million. The increase in loss is also contributed by additional loss on goodwill impairment in FY2020 amounted to RMB277.9 million caused by tighter liquidity situation of our customers,decrease in volume of our sales transactions and the detrimental impact of COVID-19 on the economy. Loss per share amounted to RMB0.15 (FY2019: RMB0.08).

Other expenses and loss amounted to approximately RMB33.3 million (FY2019: other income and gain of approximately RMB350.3 million). The decrease was primarily attributable to the decrease in government subsidies and grants and VAT refunds under Comprehensive Utilisation of Resources Policy amounted to RMB283.5 million and the recognition of fair value of derivative financial instruments amounted to RMB102.1 million in 2019.

During the year,the sales volume of electrolytic copper decreased 45.6% to 216,325 metric tons (FY2019: 397,327 metric tons),with a decrease of 6.4% in average selling price to RMB39,368 per ton (FY2019: RMB42,071 per ton). For the year ended 31 December 2020,revenue from trading of electrolytic copper amounted to approximately RMB8.5 billion (FY2019: approximately RMB16.7 billion),representing a decrease of 49.1% compared to last year.

The sales volume of recycled copper products increased 7.3% to 183,742 metric tons during the year (FY2019: 171,228 metric tons),with an increase of 3.6% in average selling price to RMB43,488 per ton (FY2019: RMB41,954 per ton). For the year ended 31 December 2020,revenue from recycled copper products amounted to approximately RMB8.0 billion (FY2019: approximately RMB7.2 billion),representing an increase of 11.2% compared to last year.

Sales of power transmission and distribution cables amounted to approximately RMB32.8 million (FY2019: approximately RMB32.0 million),representing an increase of 2.4% compared to last year.

With the COVID-19 situation in China generally under control,together with the roll out of COVID-19 vaccines,CMRU expect China's economy to continue to improve. The International Monetary Fund (IMF) predicts that the global economy will increase 5.5% in 2021 and the economy in the PRC will increase 8.1%. With the strategic advancement of "carbon dioxide reaching the peak" and "carbon dioxide neutralisation" under the 14th Five-Year Plan in the PRC,the demand of copper will be significantly stronger in areas such as new infrastructure construction,new energy automobile and facilities,high tech end home appliances and electronic devices. It also bring new unprecedented opportunities for CMRU.

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 closely monitor the changes in the macro environment and the latest development of the COVID-19 pandemic,adopt proactive and positive response strategies,and react prudently and quickly to market changes. 2021 is the first year of the 14th Five-Year Plan,the main tasks of CMRU are: to increase its efforts in talent exploration,strengthen its innovation and R & D capabilities,to continuously improve the quality and service level of all types of products,to consolidate CMRU's existing advantages with efficient operation capability and gradually expand the business footprint to further increase market share and create long-term value for its Shareholder."

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.