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CQME Announces 2013AR Results; Profit Attributable to Shareholders Increased 14.3%.

Hong Kong, Mar 26, 2014 - (ACN Newswire) - Chongqing Machinery & Electric Co., Ltd. ("CQME" or the "Company", stock code: 2722) and its subsidiaries (the "Group") is pleased to announce the audited consolidated results of the Group for the year ended 31 December 2013 (the "Period").

Financial Highlights

‧-- Revenue increased by approximately 8.9% to approximately RMB9,701,044,000

-- Gross profit increased by approximately 4.8% to approximately RMB1,084,780,000

-- Profit attributable to shareholders increased by approximately 14.3% to approximately RMB506,829,000

-- Earnings per share was approximately RMB0.14

Total revenue of the Group for the year ended 31 December 2013 was approximately RMB9,701.0 million (2012:RMB8,908.0 million), representing an increase of approximately RMB793.0 million or approximately 8.9% over last year. Gross profit was approximately RMB1,084.8 million (2012: RMB1,034.7 million), representing an increase of approximately RMB50.1 million or approximately 4.8% over last year. Profit attributable to the shareholders of the Company amounted to approximately RMB506.8 million (2012: RMB443.4 million), representing an increase of approximately RMB63.4 million or approximately 14.3% over last year.

Automobile parts and components, the Chinese automobile market maintained stable growth, driving the recovery of automobile industry, of which the sales of medium to large passenger cars recorded a slight increase and heavy-duty trucks saw a rapid growth, which drove the growth of gear box and steering systems business as closely related with the Group. The market shares of diesel engine business and power equipment increased, while the market demand of engineering machinery, vessels, etc. was still low and the sales throughout the year declined slightly. (During the period, the Company adopted HKFRS 11 "Joint Arrangements" to restate the gains from and interests in engine business using the equity method, which is reflected in the share of profits of jointly entities). The overall automobile parts and components business of the Group achieved growth, with revenue for the year amounting to approximately RMB1,247.3 million, representing an increase of approximately 1.4% from the corresponding period of last year. The segment of automobile parts and components is expected to realize stable growth in 2014 as driven by Chinese new-type urbanization construction.

Power equipment, the electrical wires and cables and non-ferrous metal powder of the segment achieved growth, while their revenue declined due to the decrease in copper price and the delayed delivery of hydroelectric generation equipment as requested by some customers. The segment recorded revenue of approximately RMB3,446.4 million for the year, representing a decrease of approximately 4.9% from the corresponding period of last year. In 2014, with the increasing business in clean energy, intelligent grid project and turbanization construction as well as the increasing business in overseas hydroelectric generating sets, this business segment is expected to recover and sustain stable growth.

General machinery, in spite of the overall weak demand in the traditional market of this segment including the iron and steel, metallurgy and cement industries, the Group intensified the expansion in new markets of petroleum and petrochemicals, coal chemicals, mining, nuclear power and wind power. The industrial pumps, separation machines and compressors business maintained stable. In particular, wind power rotor blades achieved a substantial growth. The segment recorded revenue of approximately RMB1,439.6 million for the year, representing an increase of approximately 8.3% over the same period of last year. In 2014, this business segment is expected to grow steadily due to the benefits from adjustments in the industrial structure and product structure.

CNC machine tools, this segment as a whole suffered a decrease in demand due to the continuous impact from the slowed expansion of production capacity of industries such as the automobile, engineering machinery, general machinery

industry and agricultural machinery. Although the Group held the leading position in the market and maintained their market share by relying on their product technology and brand advantage of the CNC hobbing machine and shaving machine, its revenue declined over the same period of last year. The segment recorded revenue of approximately RMB935.6 million, representing a decrease of approximately 9.2% over the same period last year.

Trade business, the bulk commodity procurement platform of the Group increased procurement types and quantities, directly reducing procurement cost of the Group by approximately RMB15.0 million. The turnover of this segment amounted to approximately RMB2,577.5 million, representing an increase of approximately 52.2% over the same period last year. In 2014, the Group will further increase the commodity types and scope of its bulk material centralized procurement as well as the supervision and control of risks, so as to save trading costs. This segment is expected to maintain steadily in 2014.

Financial services, Chongqing Machinery and Electric Holding (Group) Finance Co., Ltd. ("Finance Company") which is controlled and owned by the Company, officially started operations on 10 April 2013. By the provision of full financial services, it provided loans, guarantees and deposits for the Group's enterprises, which resulted in a decrease in financial costs and an increase in fund efficiency. Revenues amounted to approximately RMB66.0 million during the period. In 2014, the Group will continue to employ the financial service functions of Finance Company and carry out financial business within the national approved scope comprehensively. This segment is expected to maintain stable growth.

Mr. Wang Yuxiang, Chairman of Chongqing Machinery & Electric Co., Ltd. said, "In 2013, The Group will take the "Twelfth Five-Year Plans" as the blueprint, lead the whole industry with the "321" strategy focusing on "sharpening up existing business, beefing up new business and keeping up innovation", deepen the reformation, enhance the management and improve quality and profitability, so as to promote the continuous and healthy development of the Company. Looking forward to 2014, the company will promote management and step up quality of economic operation; deepen reform and add motive force for corporate development; continue to make innovation to drive the sustainable development of the Company; care for people; standardize management and control and strictly control operation risks of the Company."

Information about Chongqing Machinery & Electric Co., Ltd.

Chongqing Machinery & Electric Co., Ltd. is the largest consolidated manufacturing conglomerate in Western China. The company's shares were traded on the Stock Exchange of Hong Kong Limited from June 13, 2008. It is primarily engaged in designing, manufacturing and sales of automobile parts and components, power equipment, general machinery and computer numerical control, or CNC, machine tools.

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Publication:ACN Newswire
Date:Mar 26, 2014
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