Xinyi Automobile Glass HongKong Entp : HK Announces 2017 Interim Results

(Hong Kong, 28 July 2017) Xinyi Automobile Glass Hong Kong Enterprises Limited ("Xinyi Hong Kong" or together with its subsidiaries, the "Group") (stock code: 8328), one of the largest vehicle glass repairing and replacement service providers in Hong Kong, announced today its unaudited interim results for the six months ended 30 June 2017 ("1H 2017").

During the period under review, Xinyi Hong Kong remained fully committed to enhancing service capacity and improving customer service facilities and quality of its services. The Group's total revenue was HK$23.2 million (1H 2016: HK$25.2 million). Gross profit was approximately HK$4.7 million (1H 2016: HK$8.8 million). The profit attributable to owners of the Company for the six months ended 30 June 2017 was HK$0.3 million (1H 2016: loss of HK$0.1 million).

Datuk TUNG Ching Sai, Chairman of Xinyi Hong Kong, said, "Amid the continuously challenging market environment, Xinyi Hong Kong, one of the most established aftermarket vehicle glass repair and replacement service providers in Hong Kong, has witnessed progress in all business segments attributable to our solid business relationship with corporate customers and insurance companies, enabling us to grasp more business opportunities. With growing public awareness of environmental protection, new energy is also gaining stronger support over traditional power sources. The increasing popularity of lithium-ion battery products in the future will change the global energy structure and the mode of electricity production and consumption, thereby presenting massive business opportunities to the Group."

Vehicle Glass Repair and Replacement Business - Maintain Stable Relationship with Existing Customers and Broaden Its Customer Base

To cater for different needs and requirements of corporate customers and insurance companies, the Group has continued to procure a wide range of vehicle glass of different brands and models for their selection. This enables the Group to maintain stable business relationships with existing customers and explore cooperation with potential business partners to broaden its customer base. Additionally, the Group has entered into two additional non-exclusive agreements with insurance companies for the provision of vehicle

glass repair services to the cars under its insurance coverage in 1H 2017. To improve the customer service facilities and service quality, the Group is in the process of developing online facilities to offer online reservations for its vehicle glass repair and replacement services.

As at 30 June 2017, the Group had a strategic service network consisting of four service centres and a motorcade service team with 21 vehicles.

New Energy - Lithium Battery and Related Business - Set as a Future Power Contributor to Protect the Environment and the Group's Business Growth Driver

The Group has continued to expand its new energy business in the PRC by purchasing various machinery for setting up lithium battery plants. The production plant has commenced the commercial production by end of Q2 2017 and the delivery for sale to customers for power battery and energy storage applications is expected to commence in Q3 2017. Two of the customers for power battery are engaged in the production of forklifts. The Group also intends to engage in the trading of forklift powered with the lithium battery, which will bring the synergistic effect in boosting the sale of both of lithium battery as well as the forklift of the customers. The management believes that this business can contribute a new source of revenue to the Group.

In March 2017, the Group has established 信義儲能微電網研究院(東莞)有限公司 ("信義儲能") with an initial registered capital of RMB10 million for the purpose of engaging in the development and sale of energy storage facilities with lithium batteries, like large-scale power banks for manufacturing facilities to facilitate load shifting and power stabilization and power banks for households. Energy storage products are expected to be launched in 1H 2018.

With regard to the wind power operation, Xinyi Hong Kong through Anhui Xinyi Power Source Company Limited (安徽信義電源有限公司, "Xinyi Power Source"), its wholly-owned subsidiary, has subscribed 18% equity interest in Xinyi Wind Power (Jinzhai) Company Limited (金寨信義風能有限公司, "Xinyi Wind"), with a capital contribution of approximately RMB2.2 million in April 2017. Xinyi Wind is in the business of development and operation of wind farms for electricity generation. Its wind farm in Anhui Province is currently under construction.

Chairman TUNG concluded, "The Group has aggressively tackled challenges and seized opportunities in the market during the review period. We are optimistic that the Hong Kong vehicle glass repairs and replacement market will remain stable over the next few years and will adhere to our proven strategies in developing the core business. In addition, we proactively engage in the new energy business with a focus on lithium battery and related business to create another major income stream of the Group. We are committed to capture growth opportunities, deliver returns to our shareholders and further strengthen our leading position in the industry."

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About Xinyi Automobile Glass Hong Kong Enterprises Limited (stock code: 8328)

Xinyi Automobile Glass Hong Kong Enterprises Limited, which commenced business in 1996, is one of the largest vehicle glass repairing and replacement service providers in Hong Kong. The Group has an extensive customer base, which include corporate customers not insured under motor vehicle insurance policies, individual customers not insured under motor vehicle insurance policies and insurance companies which the Group has entered into cooperation arrangements for the provision of vehicle glass repairing and replacement services to the insured car owners. Currently, it has established a strategic service network, comprising four service centres and a motorcade service team with 21 vehicles. In early 2017, the Group has started to engage in new business, with a focus on lithium battery and related business.