Seizes the demand of new infrastructure and develops high-end aluminium products Carries on the spirit of innovation to strengthen product advantages

Results Highlights:

• Seized the demand of new infrastructure, and continued to leverage the synergistic advantages of its three core businesses.
• Resumed operation and production in the second quarter, with all businesses progressed in an orderly manner.
• Recorded sustained income from aluminium alloy formwork leasing business.
• Contributed to light-weight development to bring about the green and smart development in the transportation sector.

HONG KONG, CHINA - Media OutReach - 28 August 2020 - 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 interim results for the six months ended 30 June 2020 ("the Period under Review"). During the Period under Review, the Group recorded an overall sales volume of approximately 351,637 tonnes, with total revenue amounting to approximately RMB8.66 billion. Profit for the period was approximately RMB530 million, while earnings per share amounted to approximately RMB0.07.

Mr. Lu Changqing, Chairman and President of China Zhongwang, said, "Major breakthroughs will be seen in the application of aluminium alloy products in areas that are significantly beneficial to the society as new infrastructure construction (the "new infrastructure") is being carried out gradually in the relevant fields, coupled with the acceleration of the industrialisation of aluminium fabrication. The Group will continue to leverage the synergistic advantages of its three core businesses and the first-mover advantages of its cutting-edge technologies and innovative products, so as to seize the opportunities for development. Meanwhile, the Group will further expand the application of aluminium alloy products in various fields, continuing to develop high-end new products to lead the development of the industry and create value for the society."

Aluminium Extrusion Business -- Continued to Implement Diversified Business Model and Consolidated its Leading Position by the Simultaneous Development of Lease and Sales

During the Period under Review, the sales volume and sales revenue of the Group's aluminium extruded products decreased as compared with those for the corresponding period of last year, which was primarily due to the disruptions caused by the COVID-19 pandemic to the production and operation of upstream suppliers and downstream customers in the first quarter of 2020, which hindered the Group from purchasing, producing and selling as usual. With the full resumption of its operation and production in April and the effective control over the domestic epidemic, the Group has gradually resumed its production and sales of aluminium extruded products, the sales volume and the sales amount of which both significantly increased by nearly 200% quarter-on-quarter  in the second quarter. As one of the key products of the Group's industrial aluminium extrusion business, aluminium alloy formwork has captured a leading market share. During the Period under Review, the revenue of leased aluminium alloy formwork rose significantly by approximately 442.8% to approximately RMB470 million.

In addition, the Group has been committed to tapping into various application sectors of high-end aluminium extruded profiles. It has maintained its success in high-end aluminium extruded profiles for vehicles, and is a Tier 1 supplier of high-end aluminium extruded products to a number of automobile manufacturers including BMW Group. Through the consistent progress of new infrastructure, the Group seized the opportunities in industry development based on the market demand, and made full use of aluminium's features and advantages to develop the aluminium products applicable to the construction of 5G base stations, intercity high-speed railways, intercity railway transit and UHV power transmission.

Aluminium Flat Rolling Business - Improved Production Efficiency and Accelerated the Pace of Industry Certification

During the Period under Review, the production and sales of aluminium flat rolled products in the first quarter were affected to a certain extent. With the resumption of its operation and production, the Group's production and sales have fully resumed in the second quarter. In addition, the Group accelerated the pace of industry certification, improved the production efficiency of the first production line by focusing on production optimisation, and provided high-quality aluminium flat rolled products to its customers in the sectors of industrial materials, transportation, aviation and aerospace. In terms of automotive sheets, the Group has become a Tier 1 aluminium sheet supplier for one of the European luxury automobile brands, enabling it to achieve an important breakthrough in developing the international market for high-end automotive sheets, which also reflected the Group's influence in the global automotive market.

Further Fabrication Business -- Catered to the Demands for Light-weight Solutions and Facilitated Industrial Upgrade

During the Period under Review, the Group continued to maintain cooperative partnerships with leading domestic new energy vehicle manufacturers such as Chery, BYD and FAW to jointly develop projects of passenger cars, commercial vehicles and light-weight new energy vehicles. With regard to urban rail transit, the Group is committed to providing high-quality further fabricated products of aluminium alloy profiles, and aluminium extruded materials for train bodies for urban rail projects in Shanghai, Guangzhou, Shenzhen, Wuhan, Hangzhou, Fuzhou, Nanning, Ningbo, etc. In addition, the Group also provided aluminium extruded materials for the whole train bodies of "Fuxing", a China Standard EMU train at a speed of 350 km/h and 250 km/h, making a contribution to the green, smart, light-weight development of urban rail transit.

Emphasised R&D to Add New Impetus to the Development of the Group

The Group has been regarding R&D and innovation as the cornerstone of corporate sustainable development, enhancing product advantages and corporate strength through continuous technological innovation. During the Period under Review, the Group completed the development of 51 new profile products and 25 new further fabricated products, and was authorised with 97 patents, as well as participated in the formulation of 9 industry standards. Its innovation capability has been consistently recognised. At the same time, the Group developed innovative corrosion resistant aluminium sheets. It will satisfy the market demand for the rapidly growing market of integrated circuit specialised equipment in China, which may hopefully break the monopoly of foreign players and effectively fill the market gap for the relevant domestic products.

Looking ahead, Mr. Lu Changqing said, "In the past six months, in the face of severe challenges posed by the pandemic, the Group has actively fulfilled its corporate social responsibility and donated money and supplies to the society. Meanwhile, we have implemented a range of infection prevention measures to limit transmission, constantly managing the risks that typified an unusual time. Last but not least, I would like to extend my gratitude to all employees, customers, suppliers and business partners for their support and trust. The Group will seize opportunities and create a new order in the challenging circumstances to lead the industry to a brighter future."