Zhuhai Zhongfu Announces 2010 Annual Results

Net profit rises 8% to RMB 145 million

Diversified product range leads to stable growth of sales volume and revenue

Cash dividend of RMB 0.09 per share and 7 bonus share for every 10 shares

Company plans to issue 5-year bond to raise RMB 1.18 billion

ZHUHAI and HONG KONG, April 14, 2011 /PRNewswire-Asia/ --

Performance Highlights

*Plastic jug and paper cup operations were acquired by Zhuhai Zhongfu in late 2009. According to PRC Accounting Standards, comparative figures have been restated to include these operations as if the operations had existed in prior periods.

China's leading beverage packaging and PET bottling company, Zhuhai Zhongfu Enterprise Holdings Limited ("Zhuhai Zhongfu"; stock code: SZ000659), today announced its annual results for the year ended 31 December 2010.

In 2010, Zhuhai Zhongfu's sales volume increased 7% as a result of the sustainable growth of China's beverage packaging industry. Despite that some regions in China experiencing a long winter season over the first two quarters, Zhuhai Zhongfu exceeded its sales target in 2010, in particular the non-carbonated drinks (water, tea and juices). Sales from non-carbonated drinks reported an encouraging increase by 19%. During the reporting period, net profit attributable to shareholders increased 8% to RMB 144.9 million. 

In late 2009 Zhuhai Zhongfu expanded its core business by acquiring the plastic jug and paper cup operations from its controlling shareholder, which further strengthened its packaging and accessories business and enhanced its supply chain solutions. This initiative helped drive the Company's overall sales, production capabilities and profitability. In 2010, the jug and cup business generated a profit of RMB 31.7 million, representing an increase of 87% over 2009's RMB 17.0 million.

Mr. Gary Guernier, Chairman of Zhuhai Zhongfu, said, "The beverage and beverage packaging industry is experiencing exponential growth in China and has a very bright future. The major beverage giants have invested much R&D effort to launch new products in China, which has resulted in rapid growth in the soft drinks market. In 2010 we were committed to enhancing our CAPEX level to capture the growth potential and opportunities arising from our clients' huge investment and rapid development. In this regard we put RMB 551.7 million toward improving our production capacity and the effectiveness of our supply chain system, which represented 139% growth in investment compared to 2009.

"Given the growing consumption and sales volume in the soft drink market in China, we will continue to explore opportunities to increase our operational scale and R&D efforts. This in turn will help enhance our competitive advantages, profitability and leadership position in China's beverage packaging industry."

As of 31 December 2010, the Company has a total share capital of 756,295,600 shares. Zhuhai Zhongfu proposed to issue 7 bonus shares for every 10 shares to shareholders, and distribute a cash dividend of RMB 0.9 (incl. tax), contributing a total of cash dividend of RMB 68 million. After the dividend distribution and pension fund transfer, the Company will have increased its share capital from 756,295,600 shares to 1,285,702,520 shares.

Zhuhai Zhongfu is regarded as the leader in China's beverage and non-beverage packaging industry, providing safe and environmentally friendly beverage and non-beverage products. Its product quality, R&D, cost control, customer service and employee training have also been well received in the industry.

The Company completed the private placement by issuing 68 million new shares, raising a total of RMB 482.8 million. The net proceeds will be fully committed to the expansion program for the Company's core businesses, namely PET bottle manufacturing, bottle blowing and drink refilling. Zhuhai Zhongfu anticipates its profitability, production and marketing capability will be further enhanced once the new facilities are integrated into its operations. The Company intends to leverage the expansion to capitalise on the booming beverage packaging industry in China as well as the expansion plans of its major customers. Zhuhai Zhongfu has already committed RMB 114 million since Q4 2010, accounting for 24% of its net proceeds, to strengthening its productivity and production presence, including the new preform centres at Beijing and Hefei, and new production lines at Inner Mongolia, Shenyang, Beijing, Datong, Hefei, Nanning, Guangzhou and Zhuhai. Nevertheless, the Company is planning to add new production lines at its Hangzhou preform centre, Wuhan PET bottling centre, Chongqing, Qingdao, Kunshan and Xinjiang, in 2011.

The Company expects demand for PET packaging to continue growing based upon the favorable economic forecast for the Mainland. The Board of Directors today announced that Zhuhai Zhongfu plans to issue a 5-year bond, raising RMB 1.18 billion. The bond will primarily be used for replacing bank loans and supplementing working capital. Mr. Guernier added, "The bond will not only help optimize our capital structure and secure the stability of our capital source, but also reducing our financing cost, providing solid financial conditions for our future expansion. Looking ahead, we will reserve profits and bank borrowings for future development while further strengthening our capital management and financial cost control."

It was also noted that during the reporting period, Zhuhai Zhongfu was recognized and awarded by various leading institutions such as the China Listed Company Development Center, China Urban Development Institute and Southern Entrepreneur Magazine, as a "Top 100 Most Valuable Listed Company 2010". 

About Zhuhai Zhongfu Enterprise Holdings Limited

Zhuhai Zhongfu Enterprise Holdings Limited ("Zhuhai Zhongfu"; stock code: SZ000659) was established in 1982. It is principally engaged in the production and marketing of PET bottling, performs, PVC and OPP labeling, and it is also engaged in drink refilling. Zhuhai Zhongfu is one of the largest PET bottle manufacturers in China and the first company supplying PET bottles to Coca Cola in China. The Company has 87 production facilities and an annual production capacity of over 8 billions of performs, and 9 billions of PET bottles. Its products include PET bottles for carbonated soft drinks, drinking water and beer. It has received various honors and awards at the national and provincial levels. The Company was listed on the Shenzhen Stock Exchange (Main Board) in 1996, the first entity in China's beverage packaging industry to be listed. For more details, please visit the Company's website: http://www.zhongfu.com.cn.

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