TAIYUAN CITY, China, October 22, 2012 /PRNewswire-FirstCall/ -- Longwei Petroleum Investment Holding Ltd. (NYSE MKT: LPH) ("Longwei" or the "Company"), an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China ("PRC"), has completed an independent appraisal of the assets purchased from Huajie Petroleum Co., Ltd. ("Huajie") and received the official asset ownership registration documents from the local government.
Longwei contracted Shanxi Wan Jia Assets Appraisal LLP ("Shanxi Wan Jia") to inspect and perform an independent valuation report of the Huajie assets purchased on September 26, 2012. The updated appraisal value of the Huajie assets was RMB 752,066,600 (approximately $119.4 million), a 7.5% increase in value over the purchase price. The updated valuation report is also an increase of approximately $3.5 million from the February 13, 2011 independent valuation report of RMB 730,113,500 (approximately $115.9 million), due to the increase in the real estate value. Shanxi Wan Jia is a certified member of the China Appraisal Society.
"The updated appraisal shows the additional value we received in the Huajie asset purchase," said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. "We are pleased to have closed on the Huajie asset purchase using our own cash resources without dilution to our shareholders, and we are now fully operational at the facility."
The Huajie facility nearly doubles Longwei's storage capacity to a total of 220,000 metric tons and extends the Company's reach into the fast-growing industrial region of northern Shanxi Province. The purchased assets include fuel storage tanks with a 100,000-metric-ton capacity with accessory facilities and equipment, delivery and distribution platforms, including a dedicated rail spur, and a vehicle loading and unloading station. The purchase also included a 3,000-square-meter office building and land use rights for 98 acres of land adjacent to the main regional rail line. The Company has posted the updated appraisal report to its corporate website at http://www.longweipetroleum.com/operations/storage-operations. The document can be seen in the "Operations" section of the website under the description of the Huajie Facility.
"We are committed to continuing to improve our level of transparency and disclosure with our shareholders," stated Mr. Cai. "We have recently achieved several milestones that we hope will be catalysts to boost shareholders' confidence in our Company and lead to an improved earnings multiple that reflects our operating performance.
"We believe our fair value is higher than currently reflected in our stock price, especially when compared to our book value," continued Mr. Cai. "Longwei has a straightforward business model, highly visible assets, and strong and stable business operations. We will continue to do our best to fully communicate the value of the Company's assets and operations to the market."
Longwei has also received the official asset ownership registration documents from the local government, as approved by the Shanxi Province, Fanshi County Administration for Industry and Commerce.
Longwei recently reported revenues of US $510.6 million and net income of US $65.1 million for the fiscal year ended June 30, 2012. At the June 30, 2012 fiscal year-end, the Company reported total assets of US $342.3 million and a book value per share of $3.31.
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China. The Company's oil and gas operations consist of transporting, storing and selling finished petroleum products, entirely in the PRC. The Company's headquarters are located in Taiyuan City, Shanxi Province. The Company has a storage capacity for its products of 220,000 metric tons located at three storage facilities within Shanxi: Taiyuan, Gujiao and Huajie, which have an individual storage capacity of approximately 50,000 metric tons ("mt"), 70,000mt, and 100,000mt, respectively. The Company has the necessary licenses to operate and sell petroleum products not only in Shanxi, but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in Shanxi.
The Company seeks to earn profits by selling its products at competitive prices with timely delivery to transportation companies, coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue from agency fees by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company's Taiyuan and Gujiao facilities. The Company seeks to continue to expand its customer base and distribution platform through the utilization of its large storage capacity, which allows the Company the flexibility to take advantage of pricing, supply and demand fluctuations in the marketplace.
Longwei was recently named to the Forbes list of "Asia's 200 Best Under a Billion" from a universe of 15,000 companies. Forbes ranked the companies based on sales growth, earnings growth and return on equity in the past 12 months and over three years. As was reported, Longwei's three-year track record is 45% sales growth, 28% earnings per share growth and 28% return on equity. The Forbes article can be found at: http://www.forbes.com/sites/christinasettimi/2012/07/25/asias-200-best-under-a-billion
For further information on Longwei Petroleum Investment Holding Limited, please visit http://www.longweipetroleum.com. You may register to receive Longwei Petroleum Investment Holding Limited's future press releases or request to be added to the Company's distribution list by contacting Dave Gentry at info@redchip.com.
Forward-Looking Statements
Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.
Contact:
At the Company:
Michael Toups, Chief Financial Officer
Tel: U.S. Office +1-727-641-1357
Email: mtoups@longweipetroleum.com
Web: http://www.longweipetroleum.com
Investor Relations:
Mike Bowdoin
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 110
Email: mike@redchip.com
Web: http://www.redchip.com
