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Wednesday, 13 August 2014, 23:00 HKT/SGT

Source: China Wood Optimization (Holding) Limited
China Wood Optimization Announces FY2014 Interim Results
Gross Profit Margin Increases Notably to Nearly 30%; Net Profit Soars Nearly 40%

HONG KONG, Aug 13, 2014 - (ACN Newswire) - China Wood Optimization (Holding) Limited ("China Wood Optimization" or the "Group;" stock code: 8099), an Advanced and New Technology Enterprise engaged in the processing, manufacturing and sales of wood products, today announced its unaudited interim results. With its self-developed wood processing procedure, the Group has achieved encouraging results with significant growth in gross profit, net profit and profit margins.

For the six months ended 30 June 2014 ("1H2014"), the Group's turnover increased 11.2% year-on-year to approximately RMB220 million. This is mainly attributable to the increase in the average selling price of the Group's Processed Wood Products (including Processed Wood Panels and Processed Finger Joint Wood Panels) by around 8.3% as compared to the same period last year, thanks to the improved product quality and higher market recognition of these products; together with the rise in turnover from Processed Wood Panels. The Group's gross profit margin also rose from around 25.5% in the first half of 2013 ("1H2013") to around 29.5% in 1H2014. Profit attributable to equity shareholders of the Company surged by 38.9%, while net margin reached 11.1%.

Processed Wood Panels
Processed Wood Panels are the Group's principal products which are generally used to produce floor planks, doors and furniture. During the period under review, sales of Processed Wood Panels increased by around 19.1% to around RMB184 million. Following the enhancement of the product quality, and the greater market recognition and market demand, the average selling price of Processed Wood Panels rose by 8.6% year-on-year.

Processed Finger Joint Wood Panels
Cut-offs and small pieces produced during the trimming process of Processed Wood Panels are pressed and further processed before lamination to form Processed Finger Joint Wood Panels, which are in the form of standard-sized boards of wooden panels and are generally used to produce wooden furniture, doors and window frames. During the period under review, sales of this segment amounted to around RMB36.5 million, as a result of the Group's focus on manufacturing Processed Wood Panels that requires fewer production processes. Nonetheless, the Group was able to raise its average selling price by around 10.7% year-on-year due to the enhancement of the product quality.

With the increasing popularity of the Group's products, the total volume of Processed Wood Products sold climbed from about 54,521 m3 in 1H2013 to about 55,967 m3 in 1H2014.

Ms. Yim Tsun, Chairlady of China Wood Optimization, said, "It is encouraging to see that the continued growth of our business not only demonstrates the popularity of our Processed Wood Products, but has also evidenced that these products are the effective substitutes of natural solid woods. We realise that our self-developed technology is the key to success and so we attach great importance to intellectual property rights. During the period under review, we have applied for registration of four patents in the PRC and three of them have been approved in May this year. In the future, we will continue to apply for the registration of new patents to maintain the Group's competitive edge and leading position in the industry."

"In April 2014, the Group's products passed a test under the REACH regulation of the European Union for 151 substances, which concerns registration, evaluation, authorisation and restriction of chemicals requirements on the use of chemical substances and their potential impacts on both human health and the environment. In addition, the Group's products also fulfilled the European Union's requirements on toy material and passed the tests for 19 heavy metal elements. These test results have further proved that our products are environmentally friendly while they do not affect human health," Ms. Yim added.

Looking ahead, China Wood Optimization will further promote the market recognition of its Processed Wood Products in the PRC in order to increase the market potential of its products. To this end, the Group will continue to expand its production capacity and integrate its manufacturing operation so as to meet the growing demand of wood products in the PRC. Moreover, the Group will expand the scopes of application and improve the quality of its Processed Wood Products. It will also extend its sales network by setting up more sales offices to promote its products. The Group is in the process of setting up three sales offices in Beijing, Chengdu and Shanghai, which will open in the third quarter of this year to enlarge the Group's market share.

About China Wood Optimization (Holding) Limited

The Group is principally engaged in the processing, manufacturing and sales of processed wood products, by employing its self-developed wood processing procedure. The Group's processed wood products are broadly divided into two categories, namely processed wood panels and processed finger joint wood panels. The Group's wood processing procedure can improve the hardness, shrinkage and swelling rate, density, deformation resistance, cracking resistance, anti-corrosiveness, bending strength and elasticity of poplar wood. Its processed wood products can be used as substitutes of natural solid woods. The Group's products are widely used to make furniture and indoor furnishing materials. Customers of the Group mainly include manufacturers of floor planks, sound box, furniture, doors and window frames and wholesalers of wooden panels.

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Aug 13, 2014 23:00 HKT/SGT
Source: China Wood Optimization (Holding) Limited

Topic: Press release summary
Sectors: Daily Finance, Daily News
From the Asia Corporate News Network

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