Global Bio chem Technology : Chem Sees 30% Increase in 1H2016 Revenue to HK$2 Billion Gross Profit Turned Around to HK$84 Million

Global Bio-chem Technology Group Company Limited ("Global Bio-chem" or "the Company", stock code: 00809) together with its subsidiaries (the "Group") reported a 30.0% increase in its consolidated revenue for the six months ended 30 June 2016 (the "Period") to HK$2,062.3 million. Such improvement was mainly attributable to the resumption of production since November 2015. With increased facility utilisation which reduce unit production cost, the Group recorded a gross profit of HK$83.9 million as compared to the gross loss of HK$170.0 million for the corresponding period last year. Net Loss for the Period narrowed by 41.6% to HK$599.5 million as compared with HK$1,027 million for the six months ended 30 June 2015.

The board of directors of Global Bio-chem does not recommend the payment of any interim dividend for the Period.

With respect to the Group's amino acids business, economic slowdown in China has imposed pressure on the market demand. The amino acids segment continued to be affected by over-capacity and on-going market consolidation in the amino acids industry. The Group had taken the opportunity to revamp and upgrade its amino acids production facilities in Dehui to lower energy consumption and raise production efficiency during its suspension last year. As production resumed since November 2015, the Group has optimised its facility utilisation and maintained flexible operation to cope with market changes. As a result, the Group's amino acids segment recorded a 261.5% increase in sales volume and a gross profit of HK$115.4 million for the Period (six months ended 30 June 2015: gross loss HK$121.4 million (restated)).

Subsequent to the resumption of production, the Group recorded a year-on-year growth of 80.1% in exports sales, generating a revenue of approximately HK$439.2 million which accounts for 21.3% of the Group's total revenue (corresponding period last year: 15.4%).

During the Period, upstream business environment remained challenging. The Group's upstream business segment recorded a revenue of HK$737.2 million and a gross loss HK$71.5 million for the Period. It is expected that overcapacity will continue to put pressure on the upstream corn refinery industry. However, as the synergy of the introduction and participation of resourceful shareholder started to take effect, the Group has been able to benefit from the corn purchase subsidies for its operation in Jilin Province. Notwithstanding the unfavourable market conditions will continue in the second half of 2016, the Group will continue to observe market changes and take a prudent approach with respect to its upstream operation and relocation timetable.

The Group's corn sweeteners segment is operated by a listed subsidiary, Global Sweeteners Holdings Limited ("GSH"). In face of the on-going consolidation in sugar and sweeteners markets, the GSH Group continued to focus on its research and development for developing high-value added products in replace of the volume play strategy. As a result, while revenue for this segment during the Period dropped to HK$290.5 million (six months ended 30 June 2015: HK$449.4 million), gross profit margin improved significantly to 14.0%( six months ended 30 June 2015: 9.3%).

The management has since last year begun to actively negotiate with Bank of China Weifeng International Branch ("BOC") to discharge the Previous Supplier Guarantees entered into by

certain subsidiaries of the Group for certain supplier loan ("Previous Supplier Loan") in favour of a major supplier 長春大金倉玉米收儲有限公司 Changchun Dajincang Corn Procurement, Ltd. ("Dajincang"). BOC has expressed its intention to release the Group from the Previous Supplier

Guarantees by the end of 2016, subject to the obtaining of their internal approval. As the term of the Previous Supplier Guarantees will expire between August to November 2016, the Supplier has indicated that they would not have sufficient financial resources to repay the Previous Supplier Loan. To avoid immediate demand for full repayment of the Previous Supplier Loan by the certain members of the Company as the guarantors pursuant to the Previous Supplier Guarantees, Dajincang proposed to refinance the Previous Supplier Loan by entering into a new supplier loan agreement with BOC for the New Supplier Loan. The aforesaid transaction is subject to the approval at an extraordinary general meeting of the Company to be convened.

In April 2016, the Group announced the proposed disposal ("Disposal") of certain pieces of land located in Lu Yuan District of Changchun and the buildings erected thereon. All resolutions in relation to the Disposal were passed by way of poll at an extraordinary general meeting of the Company on 21 June 2016. The Disposal will not only strengthen the Group's financial position, but also help finance the relocation of its production facilities, which will offer an opportunity to upgrade the Group's production facilities as well as to readjust the product mix and production capacity to better meet market needs.

Looking forward, Mr. Kong Zhanpeng, the Chief Executive Officer of Global Bio-chem, said: "In order to maintain its competitiveness, the Group will strive to maintain its market position, diversify its product range and enhance its capability in developing high value-added products and new applications through research and development efforts and strategic business alliance with prominent international market leaders. The Group will also optimise its risk/return decision with respect to capital expenditure."

About Global Bio-chem

Global Bio-chem (stock code: 00809.HK) has been listed on the Main Board of the Stock Exchange of Hong Kong Limited since 2001. The Group is principally engaged in the manufacture and sale, research and development of corn-based biochemical products in the People's Republic of China ("PRC"). Headquartered in Hong Kong and with its production facilities based in various provinces in the PRC, Global Bio-chem is one of the leading corn-based biochemical product manufacturers worldwide. Global Bio-chem is also the parent company of Global Sweeteners Holdings Limited (stock code: 03889.HK), one of the largest corn sweeteners producers in the PRC, which is also listed on the Main Board of The Stock Exchange of Hong Kong Limited.

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Issued by: Global Bio-chem Technology Group Company Limited Through: CorporateLink Limited

Media Enquiry: CorporateLink Limited

Six months ended 30 June

HK$'000 HK$'000

(restated)