China Zenix Auto International Limited Reports First Quarter 2021 Financial Results

ZHANGZHOU,China,May 26,2021 -- China Zenix Auto International Limited(OTC: ZXAIY) ("Zenix Auto" or the "Company"),one of the largest commercial vehicle wheel manufacturers in China in both the aftermarket and OEM market by sales volume,announced today its unaudited financial results for the first quarter ended March 31,2021.

Financial Highlights

First Quarter 2021:

Revenue grew 23.8% year-over-year to RMB397.3 million (US$60.6 million);

Total unit sales in the OEM market increased by 79.1% year-over-year as a result of a significant increase in the Company's wheel sales during the first quarter of 2021,especially in the heavy- and medium-duty categories;

Net loss and total comprehensive loss for the first quarter of 2021 was RMB128.4 million (US$19.6 million);

As of March 31,2021,Zenix Auto had bank balances and cash of RMB528.2 million (US$80.6 million) and fixed bank deposits with a maturity period over three months of RMB210.0 million (US$32.1 million),which were equivalent to RMB14.3 (US$2.18)in cash and fixed bank deposits per American Depositary Share ("ADS");

Total equity attributable to owners of the Company was RMB1,906.3 million (US$291.0 million) as of March 31,2021.

Mr. Junqiu Gao,Deputy CEO and Chief Sales and Marketing Officer of Zenix Auto,commented,"In the first quarter of 2021,our results reflect key drivers of the automotive industry in China and the lingering effects of COVID-19 in international markets."

"According to the China Association of Automobile Manufacturers,commercial vehicle sales in China rose by 77.3% year-over-year in the first quarter of 2021. Our unit sales increase of 79.1% in the OEM segment surpassed the industry growth as we improved our market leadership in this key segment. The forthcoming national implementation of the National VI emission standards in 2021,stricter enforcement of anti-overloading regulations,and introduction of new infrastructure projects,all generated higher demand for new commercial vehicles,especially trucks."

"Our strong OEM sales in the first quarter of 2021 partially mitigated the continuing weakness in international markets and the Chinese aftermarket segment. There was lower international demand reflecting the impact of COVID-19. Many economies are still struggling and there is a preference for lower-priced wheels in price sensitive markets. Chinese aftermarket sales declined due to ongoing anti-overloading campaign creating demand for new vehicles as well as the mandate for newer and more environmental-friendly vehicles."

"We are well positioned in each of our markets and supply our industry-leading portfolio of advanced wheels to a large number of domestic OEMs. We have increased our research and development investment to further develop wheel materials and designs to improve performance and quality while taking steps to reduce unit costs concurrently."

Mr. Martin Cheung,CFO of Zenix Auto,"We had bank balances of RMB528.2 million (US$80.6 million)and fixed bank deposits of RMB210.0 million (US$32.1 million)at the end of the first quarter of 2021. These amounts were equivalent to RMB14.3 (US$2.18)in cash and fixed bank deposits per ADS on March 31,2021. We will use these financial resources to improve our operations to increase sales and returns for long-term profitability."

2021 First Quarter Results

Revenue for the first quarter ended March 31,2021 increased by 23.8% to RMB397.3 million (US$60.6 million) from RMB 320.8 million for the first quarter of 2020. The increase in revenue on a year-over-year basis was mainly due to a stronger OEM market.

Aftermarket sales in China were RMB92.5 million (US$14.1 million) in the first quarter of 2021,decreased from RMB104.8 million in the first quarter of 2020. Total unit sales in the aftermarket decreased by 5.5% year-over-year while average pricing decreased by mid-single digit year-over-year. The aftermarket wheel segment was negatively affected by an increase in the number of new vehicles on the road,a demand shift to lower-priced products and the Chinese government's heightened anti-overloading enforcement.

Sales to the Chinese OEM market were RMB279.9 million (US$42.7 million) in the first quarter of 2021,compared to RMB168.4 million in the same quarter of 2020. Total unit sales in the OEM market increased by 79.1% year-over-year as a result of a significant increase in the Company's wheel sales during the first quarter of 2021,especially in the heavy- and medium-duty categories.

International sales were RMB24.9 million (US$3.8 million) in the first quarter of 2021,compared to sales of RMB 47.6 million in the first quarter of 2020. Total unit sales in the international markets decreased by 40.9% year-over-year in the first quarter of 2021 as weaker demand in price sensitive regions such as Southeast Asia,negatively affected overall sales.

In the first quarter of 2021,domestic aftermarket sales,domestic OEM sales and international sales contributed 23.3%,70.4% and 6.3% of revenue,respectively.

Sales of tubed steel wheels accounted for 38.4% of revenue in the first quarter of 2021 compared to 38.8% of revenue in the same quarter in 2020. Tubeless steel wheel sales accounted for 41.8% of revenue in the first quarter of 2021 compared to46.0% of revenue in the same quarter of 2020. Tubed and tubeless steel wheel sales remained the main sources of revenue for the Company. Sales of aluminum wheels accounted for 14.9% of revenue in the first quarter of 2021 compared to 10.1% of revenue in the same quarter a year ago.

Gross loss was RMB61.8 million (US$9.4 million) in the first quarter of 2021,compared toa gross loss of RMB 2.1 million in the same quarter of 2020. The negative gross margin in the first quarter of 2021 was mainly due to pricing pressure across all segments,weaker demand in the aftermarket and international markets,and rising raw material costs.

Selling and distribution expenses were RMB34.6 million (US$5.3 million) in the first quarter of 2021,compared to RMB25.6 million in the first quarter of 2020. As a percentage of revenue,selling and distribution costs were 8.7% in the first quarter of 2021,compared to 8.0% in the first quarter a year ago.

Research and development ("R&D") expenses were RMB18.4 million (US$2.8 million) in the first quarter of 2021,compared to RMB11.9 million in the first quarter of 2020. As a percentage of revenue,R&D expenses increased to 4.6% in the first quarter of 2021,compared to 3.7% in same quarter of 2020.

Administrative expenses were RMB37.7 million (US$5.7 million) in the first quarter of 2021,compared to RMB31.2 million in the first quarter of 2020. As a percentage of revenue,administrative expenses were 9.5% in the first quarter of 2021,compared to 9.7% of revenue in the first quarter of 2020.

Net loss and total comprehensive loss for the first quarter of 2021 was RMB128.4 million (US$19.6 million),compared to net loss and total comprehensive loss of RMB60.6 million in the same quarter of 2020.

Basic and diluted loss per ADS in the first quarter of 2021 was RMB2.49 (US$0.38) compared to basic and diluted loss per ADS of RMB1.17 in the same quarter of 2020.

During the first quarters of 2021and 2020,the weighted average number of ordinary shares was 206.5 million and the weighted average number of ADSs was 51.6 million.

As of March 31,Zenix Auto had bank balances and cash of RMB528.2 million (US$80.6 million) and fixed bank deposits with a maturity period over three months of RMB210.0 million (US$32.1 million). Short-term bank borrowings were RMB558.0 million (US$85.2 million). Total equity attributable to owners of the Company was RMB1,906.3 million (US$291.0 million).

For the first quarter ended March 31,the Company recorded cash outflows from operating activities of RMB158.7 million (US$24.2 million). Capital expenditures for the purchase of property,plant and equipment were RMB0.8 million (US$0.1 million).

Conference Call Information

The Company will host a conference call,to be simultaneously webcast,on Wednesday,2021 at 8:00 a.m. ET/ 8:00 p.m. Beijing Time. Interested parties may participate in the conference call by dialing +1-877-407-0782 (U.S. Toll Free) or +1-201-689-8567 (International). Please dial in five minutes before the call starting time and ask to be connected to the "China Zenix Auto" conference call.

A replay will be available shortly after the conclusion of the conference call through June 26,at 8:00 a.m. ET. Interested parties may access the replay by dialing +1-877-481-4010 (U.S. Toll Free) or +1-919-882-2331 (International) and using Conference ID 41345to access the replay.

Exchange Rate Information

The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. All translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00,the effective noon buying rate as of March 31,2021 in The City of New York,for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board. The percentages stated are calculated based on RMB amounts.

About China Zenix Auto International Limited

China Zenix Auto International Limited is one of the largest commercial vehicle wheel manufacturers in China in both the aftermarket and OEM market by sales volume. The Company offers more than 883series of aluminum wheels,tubed steel wheels,tubeless steel wheels,and off-road steel wheels in the aftermarket and OEM markets in China and internationally. The Company's products are primarily sold to large PRC commercial vehicle manufacturers and exported to over 54 distributors in more than 24 countries worldwide. With six large,strategically located manufacturing facilities in multiple regions across China,the Company has a designed annual production capacity of approximately 15.5 million units of steel and aluminum wheels as of March 31,2021. For more information,please visit:www.zenixauto.com/en.

Safe Harbor

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. The Company may make written or oral forward-looking statements in its periodic reports to the SEC,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees. Statements that are not historical facts,including statements about the Company's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these risks is included in our filings with the SEC. The consequences of the coronavirus outbreak to economic conditions and the automobile industry in general,and the financial position and operating results of the Company in particular,have been material in 2020,are changing rapidly,and cannot be predicted. The Company does not undertake any obligation to update any forward-looking statement,except as required under applicable law. All information provided in this press release and in the attachments is as of the date of the press release,and the Company undertakes no duty to update such information,except as required under applicable law.

For more information,please contact

Kevin Theiss

Awaken Advisors

Tel: +1-(212) 521-4050

Email: Kevin@awakenlab.com

- tables follow -

China Zenix Auto International Limited

Unaudited Condensed Consolidated Statements of Profit or Loss and Other

Comprehensive Income

For the three months ended March 31,2021 and 2020

(RMB and US$ amounts expressed in thousands,except number of shares and per share data)

Three Months Ended March 31,

2020

2021

2021

RMB' 000

RMB' 000

US$' 000

Revenue

320,783

397,280

60,637

Cost of sales

(322,874)

(459,097)

(70,072)

Gross loss

(2,091)

(61,817)

(9,435)

Other operating income

3,059

3,212

490

Net exchange gain (loss)

72

(15)

(2)

Selling and distribution costs

(25,565)

(34,633)

(5,286)

Research and development expenses

(11,855)

(18,402)

(2,809)

Administrative expenses

(31,217)

(37,659)

(5,748)

Finance costs

(5,985)

(5,707)

(871)

Lossbefore taxation

(73,582)

(155,021)

(23,661)

Income tax credit

13,018

26,575

4,056

Lossand total comprehensive loss

for the period

(60,564)

(128,446)

(19,605)

Lossper share

Basic

(0.29)

(0.62)

(0.09)

Diluted

(0.29)

(0.62)

(0.09)

Lossper ADS

Basic

(1.17)

(2.49)

(0.38)

Diluted

(1.17)

(2.49)

(0.38)

Shares

206,500,000

206,000

ADSs

51,625,000

51,000

China Zenix Auto International Limited

Unaudited Condensed Consolidated Statements of Financial Position

(RMB and US$ amounts expressed in thousands)

December 31,

2020

March 31,

2021

March 31,

2021

RMB'000

RMB'000

US$' 000

ASSETS

Current Assets

Inventories

90,351

170,735

26,059

Trade and other receivables and prepayments

617,328

581,500

88,754

Pledged bank deposits

26,000

25,000

3,816

Fixed bank deposits with maturity period over three months

290,000

210,000

32,052

Bank balances and cash

616,290

528,203

80,620

Total current assets

1,639,969

1,515,438

231,301

Non-Current Assets

Property,plant and equipment

960,453

993,874

151,695

Right-of-use assets

348,174

345,818

52,782

Deposit paid for acquisition of property,plant and equipment

62,083

3,720

568

Deferred tax assets

117,846

144,540

22,061

Intangible assets

17,000

17,000

2,594

Long term prepayments

12,000

11,000

1,679

Total non-current assets

1,517,556

1,952

231,379

Total assets

3,157,525

3,031,390

462,680

EQUITY AND LIABILITIES

Current Liabilities

Trade and other payables and accruals

489,380

491,771

75,059

Bank borrowings

558,000

558,000

85,167

Total current liabilities

1,047,380

1,049,771

160,226

Deferred tax liabilities

70,111

70,230

10,719

Deferred income

5,310

5,111

780

Total non-current liabilities

75,421

75,341

11,499

Total liabilities

1,122,801

1,125,112

171,725

EQUITY

Share capital

136

136

21

Paid in capital

392,076

392,076

59,842

Reserves

1,642,512

1,514,066

231,092

Total equity attributable to owners of the company

2,034,724

1,906,278

290,955

Total equity and liabilities

3,680

China Zenix Auto International Limited

Unaudited Condensed Consolidated Statements of Cash Flows

For the three months and year ended March 31,2021

(RMB and US$ amounts expressed in thousands)

Three Months Ended

OPERATING ACTIVITIES

March 31,2021

RMB' 000

US$' 000

Lossbefore taxation

(155,661)

Adjustments for:

Depreciation of right-of-use assets

2,356

360

Depreciation of property,plant and equipment

29,526

4,507

Release of deferred income

(199)

(30)

Finance costs

5,707

871

Loss on disposal of property,plant and equipment

17

3

Interest income

(2,379)

(363)

Operating cash flows before movements in working capital

(119,993)

(18,313)

Increase in inventories

(80,384)

(12,269)

Decrease in trade and other receivables and prepayments

36,763

5,611

Increase in trade and other payables and accruals

2,344

358

Cash used inoperations

(161,270)

(24,613)

Interest received

2,532

386

NET CASH USED INOPERATING ACTIVITIES

(158,738)

(24,227)

INVESTING ACTIVITIES

Purchase of property,plant and equipment

(829)

(127)

Withdrawal of pledged bank deposits

150,000

22,894

Placement of pledged bank deposits

(149,000)

(22,742)

Proceeds on disposal of property,plant and equipment

26

4

Deposits paid for acquisition of property,plant and equipment

(3,720)

(568)

Placement of fixed bank deposits with maturity periods

over three months

(80,000)

(12,210)

Withdrawal of fixed bank deposits with maturity periods

over three months

160,000

24,421

NET CASH FROMINVESTING ACTIVITIES

76,477

11,672

FINANCING ACTIVITIES

New bank borrowings raised

340,894

Repayment of bank borrowings

(340,000)

(51,894)

Interest paid

(5,738)

(876)

NET CASH USED INFINANCING ACTIVITIES

(5,738)

(876)

NET DECREASE IN CASH AND CASH EQUIVALENTS

(87,999)

(13,431)

Cash and cash equivalents at beginning of the year

616,290

94,064

Effect of foreign exchange rate changes

(88)

(13)

Cash and cash equivalents at end of the year

528,620

View original content:/news-releases/china-zenix-auto-international-limited-reports-first-quarter-2021-financial-results-301299472.html