Qihang Equipment Company Limited (Formerly China Wonder Limited)

(The "Company" or "Qihang")

Interim Results for the six months ended 30 June 2012

Qihang (AIM:QIH) was admitted to AIM on 4th July 2011 via the reverse acquisition of China Wonder Limited which had become a cash shell in April 2011 following the disposal of its operating businesses.

Qihang, based in Zhenjiang, Jiangsu Province, Eastern China, is a fast growing machine tool manufacturer including large lathe and milling machines capable of creating huge components of greater than one metre in diameter and sixty tonnes in weight. The Company is one of the few businesses which can manufacture milling machines for processing complicated screws used in the plastic and petrochemical industry in China.

Financial Highlights

·         Cash at period end of RMB62 million (2011: RMB46 million)

·         Turnover down 14% to RMB118 million (2011: 137 million)

·         Gross profit for the period down by 26% to RMB28 million (2011: RMB38 million)

·         Profit from operations for the period is RMB1.5 million (2011: RMB16.4 million)

Chairman's Statement:

I am pleased to announce the interim results for Qihang Equipment Company Ltd for the 6 months to June 30th 2012.  The Company made a loss of RMB 4,090,000 (approximately £400,000) for the period on a turnover of RMB 117,773,000 (approximately £11.5 million). The loss arises from a reduction in sales due to the prevailing market conditions within China.  The results for the first half of the year include a contribution of RMB14.8 million to turnover and RMB3.8 million to gross profit from Zhenjiang Anda Coal Mine Special Equipment Company ("ZACM") which was acquired in January 2012.  As these figures are materially below the expectations of the directors when ZACM was purchased, we are currently negotiating with the original owners to sell ZACM back to them.

The trading of the Company has been disappointing so far this year. The effect of the general slowdown within China and the European debt crisis has been seen in both our home province of Jiangsu and also within the Machine Tool Industry throughout China and the rest of the world.  Indeed, the Economic Department of the British Embassy estimated that Jiangsu may have shown no growth at all in the summer months.

We believe that we have maintained our market share during this difficult period. We increased our sales network and now have over 300 sales distributors, an increase of 40% over last year. 

Although the month of July was below expectations, August showed an upturn in both deliveries and orders and September has started well.  We are cautiously optimistic that this positive trend will continue for the rest of the year and are determined to demonstrate an improved performance in the second half.

27 September 2012

For the details of the interim results, please go to Financial Section of our website.



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