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Wednesday, 12 March 2014, 15:10 HKT/SGT

Source: Changmao Biochemical Engineering Company Limited
Changmao Biochemical Engineering Company Limited Turnover Increases by 7.6% to RMB703 Million in 2013
-- Profit Attributable to Equity Holders of the Company Rises by 41.5% to about RMB70 Million
-- Lianyungang Plant will Take the Lead to Start the Project of Manufacturing of Maleic Anhydride Using Butane
-- A New Key Project in Future Development

HONG KONG, Mar 12, 2014 - (ACN Newswire) - Changmao Biochemical Engineering Company Limited ("Changmao" or the "Group," stock code: 954), a leading food additive manufacturer in China, announced its audited annual results for the year ended 31 December 2013.

During the year under review, the Group's consolidated turnover increased by 7.6% year-on-year to RMB703 million. Gross profit rose by 32.6% year-on-year to RMB169 million with gross profit margin increasing by 4.5 percentage points to 24%. The Group's good business performance in 2013 was mainly attributable to the growth in the sales of food additives and improvement in gross profit margin of tartaric acid and malic acid, its strategic products. Profit attributable to equity holders of the Company also rose notably by 41.5% to about RMB70 million when compared to 2012. Basic earnings per share were RMB0.132. The Board recommended payment of a final dividend of HK$0.04 per share (including tax) for the year ended 31 December 2013.

Mr. Rui Xin Sheng, Chairman and Executive Director of Changmao, said, "The Group's successful transfer of its listing from the GEM to the Main Board in June 2013 marked an important milestone and demonstrated our solid growth in both business development and financial strength. Meanwhile, our Lianyungang plant, which began construction in early this year, is to manufacture maleic anhydride, boosting our cost and market advantages while facilitating Changmao's advance to new heights."

The world's largest tartaric acid manufacturer and China's largest malic acid manufacturer

Changmao is one of the leading food additive manufacturers in China and focuses on manufacturing and selling high quality organic acids and sweeteners. Its major products include tartaric acid, malic acid and aspartame. Changmao is the largest tartaric acid manufacturer in the world with an annual capacity of approximately 20,000 tons, and is also the largest malic acid manufacturer in China with an annual capacity of approximately 12,000 tons.

The Group's food additives are widely used in alcohol and beverages, foods, pharmaceutical and healthcare products as well as the chemical industry. Its major clients are well-known domestic food companies and international food and beverage enterprises as it has built a sales network around the world. In 2013, domestic sales accounted for approximately 45% of total turnover with overseas sales covering the remaining 55% with key markets in major food additive consumer countries including Japan, Europe, Australia, the US and the Middle East. The Group has proactively adjusted its sales strategy so as to enhance its bargaining power and direct access to the end-user market. During the year, sales of tartaric acid in Europe recorded steady growth, starting a new direction for international sales.

During the year, the rapid expansion of the food additive market and its size have more than offset the rising costs of raw materials and production. Meanwhile, the Group has introduced a number of strategic measures to accelerate business development. It has also been conscientious in the implementation of environmental protection measures. On top of corporate earnings, its social value is clearly reflected through its strict adherence to the pollution discharge standards and active fulfillment of our corporate social responsibilities.

Changmao Biochemical Lianyungang Company Limited will be completed the construction of the production base in 2014. As a key project in its future development strategy, the production base in Lianyungang is suitable for mass production of food additives offering a strong competitive advantage. Meanwhile, it will use butane to replace benzene, which not only significantly reduces production costs, but also boosts the competitiveness of downstream products while being more environmentally friendly. Also, the products including fumaric acid and malic acid made of butane are increasingly popular among international food manufacturers, so this capability provides a better edge in the market. Once the production base in Lianyungang commences production, the Changzhou production plant will replace the raw materials of existing maleic anhydride production lines aiming to enhance the competitiveness of existing products through a more reliable material source and further expand the Group's economies of scale.

The Group has consistently prioritized research and development and innovation. Currently, its research and development team comprises 89 R&D professionals. At the same time, the Group has also commenced major research projects with leading universities and research institutes in China including Tsinghua University, Fudan University, Chinese Academy of Sciences, Changzhou University and Nanjing University of Technology. The Group believes that these advanced research and development results will enable it to seize future opportunities and launch new products, thereby boosting profit.

Mr. Rui added, "Looking ahead, the Group will continue to promote the updating and upgrading of the existing product chain. Our strategic goal is to develop and produce high value-added food additives thereby improving our food additive series including acidulants and sweeteners. In this way, the Group will provide the best and most suitable ingredients to high-end food manufacturers, introduce new dynamics to the Group, improve our overall competiveness and bring a new profit centre to Changmao."

About Changmao Biochemical Engineering Company Limited

Changmao Biochemical Engineering Company Limited is one of the leading food additive manufacturers in China and focuses on manufacturing and selling high quality organic acids and sweetener used in food additives. The Group's products are widely used in the food and beverage, pharmaceutical and chemical industries and its major markets include China, Japan, Europe, Australia, the US and the Middle East. "Changmao" is a renowned brand in China and has established a strong reputation in the international market. Changmao Biochemical was listed on the GEM Board in Hong Kong in 2002 and was transferred to the Main Board in June 2013.

Strategic Financial Relations (China) Limited
Ms. Winnie Lau
Tel: (852) 2864 4876
[email protected]
Ms. Katty Cheung
Tel: (852) 2864 4850
[email protected]

Source: Changmao Biochemical Engineering Company Limited

Topic: Press release summary
Sectors: Daily Finance, Chemicals, Daily News, BioTech
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Changmao Biochemical Engineering Company Limited Releated News
Mar 12, 2014 15:17 HKT/SGT
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