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Wednesday, 12 November 2014, 19:25 HKT/SGT

Source: China Wood Optimization (Holding) Limited
China Wood Optimization Announces 2014 Third Quarterly Results
- Net Profit Surges by More Than 50%
- Net Profit Margin Reaches 12.6%

HONG KONG, Nov 12, 2014 - (ACN Newswire) - China Wood Optimization (Holding) Limited ("China Wood Optimization" or the "Group"; stock code: 8099), an advanced new technology group engaged in processing, manufacturing and sales of wood products, today announced its FY2014 third quarterly results. Through distinctive self-developed wood processing procedures, the Group managed to record continuous growth in turnover, gross profit and net profit, with net profit surging by more than 50%.

For the nine months ended 30 September 2014 ("Q3 2014" or "the review period"), the increasing market recognition of the Group's processed wood products (including processed wood panels and processed finger joint wood panels) and the well-received less-shaved processed wood panels promoted by the Group have boosted its turnover by 13.5% to approximately RMB367 million when compared with the same period in 2013 ("Q3 2013"). Gross profit margin was maintained at a healthy level of 28.1%. This performance plus the drop of selling and administrative expenses as a percentage of turnover and the reduction in finance costs have resulted in a surge in profit attributable to equity shareholders of the Company by approximately 52.6% to approximately RMB46.2 million, while net profit margin also increased significantly to 12.6%.

Processed Wood Panels
Processed wood panels are the Group's principal products which are generally used to produce floor planks, doors, sound box and furniture. In view of the increasing popularity of processed wood panels, the Group has been actively promoting less-shaved processed wood panels to its customers. This kind of panels involves lesser production processes and lower wastage of production materials, which shorten the production cycle and increase production output, sales amount and production efficiency. Less-shaved processed wood panels has been well-received by the market since its launch, driving the total sales revenue of the segment by approximately 25.9% to approximately RMB325 million. The average selling prices of this segment has been adjusted from approximately RMB3,717 per cubic meter in the same period last year to approximately RMB3,692 per cubic meter. This was mainly because less-shaved processed wood panels involve lesser production processes and thus have a lower average selling price than that of traditional processed wood panels.

Processed Finger Joint Wood Panels
Cut-offs and small pieces produced during the trimming process in the production 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. As the Group intends to focus on the sales of processed wood panels, turnover from sales of this segment decreased to approximately RMB41.8 million in Q3 2014. Nonetheless, the enhancement of the product quality has boosted the average selling price of the segment to increase by approximately 8.8% to approximately RMB4,359 per cubic meter as compared to that of Q3 2013.

Improvements in quality and increasing market recognition of the Group's processed wood products have boosted the demand, and the total sales volume of processed wood products has risen from approximately 85,569 cubic meters in Q3 2013 to approximately 97,532 cubic meters during the review period.

Ms. Yim Tsun, Chairlady of China Wood Optimization, said, "We are pleased to see a rising demand for our processed wood products. To capture the opportunity, the Group is optimising its product quality as well as expanding the application of its wood processing procedures through R&D. Moreover, the opening of our sales offices in Beijing, Chengdu and Shanghai will speed up our market expansion plan."

"We realise that our self-developed technology is the key to success, so we attach great importance to intellectual property rights. For the four patents that we have applied for registration in China earlier, three of them were approved in May while the last one has also been approved in July 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."

Looking ahead, China Wood Optimization will continue to expand its production capacity and integrate its manufacturing operation so as to meet the growing demand of wood products in China. The Group plans to increase the sales of Processed Wood Panels, in particular less-shaved processed wood panels, in order to facilitate sales growth by utilising its production capacity more effectively. As to R&D, the Group is studying the feasibility of using different tree species including both coniferous (such as pine wood) and broad leaf (such as rubber wood) as materials for processed wood products. In addition, the Group will participate in more local exhibitions to further enhance the acceptance of its products in the China market, thus strengthening its products' potential and 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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Nov 12, 2014 19:25 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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