China Zhongwang’s Revenue Increases by 14% to RMB18.7 Billion in the First Nine Months of 2019

Results
Highlights:

• Sales volume
  and revenue in the first nine months of 2019 recorded double-digit growth
• Aluminium extrusion business grew organically, rapidly
  expanding the aluminium alloy formwork leasing business
• Production
  capacity of aluminium flat rolling business continued on the rise, doubled the
  revenue and productivity

Financial Highlights:

HONG KONG, CHINA – Media
OutReach – 31 October 2019 – China Zhongwang
Holdings Limited (“China Zhongwang” or the “Company”, together with its
subsidiaries the “Group”, stock code: 01333), a world-leading fabricated
aluminium products developer and manufacturer, announced its unaudited
consolidated results for the nine months ended 30 September 2019 (“the Period
under Review”). During the Period under Review, the production efficiency of aluminium extrusion products and aluminium flat rolling products continued to rise, propelling the Group’s sales volume to increase by 32.5% to 760,000 tonnes. The total revenue grew 14.0% to RMB18.7 billion. Gross profit was up by 3.0% to RMB5.42 billion, with a gross profit margin of 29.1%. Net profit was RMB2.22 billion.

Mr. Lu Changqing, Chairman and President of China Zhongwang, said, “To support the sustainable
development of the Group’s businesses, we have been exploring the feasibility
of various business models for the last few years. In mid 2019, the Group
commenced the leasing business of aluminium alloy formwork, which provided the
Group with direct access to the end market and promoted light-weight solutions
for green construction . At the same time, the production capacity of the
aluminium flat rolling business continued to expand, constantly driving up the
production efficiency to bring positive impact to the Group’s sales volume.”

Boosted Promotion of Aluminium Alloy Formwork Leasing Business

During the Period under
Review, the Group persisted in promoting the leasing business of aluminium
alloy formwork. Compared with the aluminium alloy formwork sales business, the
aluminium alloy formwork leasing business has a higher gross profit margin and
profit margin. In the medium and long term, the leasing of aluminium alloy
formwork can create a recurring income source and contribute to a higher profit.
After a few months of operation, the Group has gained a deeper understanding of
the key factors in the execution and has made improvements in various stages,
including production, assembly, transportation, warehousing, application,
maintenance, and retrieval process. The aim was to raise the efficiency and
leverage the advantage of the leasing model. In addition, the Group’s
capability to produce a comprehensive range of aluminium formwork that includes
supporting components and connectors has been developing according to schedule.
By unlocking the potential of aluminium formwork’s applied usage, it can become
the long-term growth engine for the Group.

Productivity of Aluminium Flat Rolling Further Unleashed

The Group continued to explore
the market for aluminium flat-rolled products. During the Period under Review,
aluminium flat-rolled products contributed the biggest proportion to the
Group’s sales volume. Benefitting from the persistent increase in efficiency,
the sales volume of flat-rolled products in the first nine months of 2019
doubled. At present, the Group produces premium flat-rolled products for
industrial customers and in the fields of new energy vehicles and green
packaging. Once the Group receives certification for premium products such as automotive
body sheets, its product portfolio will be fully upgraded and profitability
enhanced. The Group’s second production line has commenced small-volume pilot
production.

Looking ahead, Mr.
Lu said, “China is speeding up its high-quality development of the economy,
the aluminium fabrication industry has been attracting an unprecedented level
of attention, boosting our confidence in the prospects of aluminium’s applied
use. The Group will keep on optimising its production capacity and diversifying
its product portfolio. We will maintain our focus on product research and
development and innovation, in order to make our contribution to the
sustainable development of the society.”

About China Zhongwang Holdings Limited

China Zhongwang is the second largest industrial
aluminium extruded products developer and manufacturer in the world and the
largest in Asia. The Group provides a myriad of quality fabricated aluminium
products and offers integrated light-weight solutions for such downstream
sectors and fields as ecological construction, transportation, machinery and
equipment and electric power engineering.

With shared resources, the Group’s core businesses,
namely industrial aluminium extrusion, aluminium flat rolling and further
fabrication have achieved synergistic development. In 2017, the Group expanded
its business presence in the transportation sector by acquiring Aluminiumwerk
Unna AG., a leading aluminium extrusion manufacturer, and Silver Yachts Ltd., a
large-scale all-aluminium superyacht builder, tapping into the end-use
manufacturing in the marine sector as well. Having built excellent teams of
research and development, technology and design, the Group is able to provide
one-stop light-weight solutions covering independent design, manufacturing,
fabrication and after-sales services. Looking ahead to the future, the Group
will continue to promote the applications of high-end fabricated aluminium
products, aiming to offer light-weight solutions to the society so that people
can live a quality life with low energy consumption.

For further information on the Group, please
visit our official website at www.zhongwang.com.