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Fuwei Films Announces Second Quarter and First Half 2016 Unaudited Financial Results
Time:2016/8/29 15:14:54  Source:

Fuwei Films Announces Second Quarter and First Half 2016 Unaudited Financial Results

--Teleconference to be held on Friday, August 26, 2016 at 9:00 am EDT-

BEIJING, August 26, 2016 / -- Fuwei Films (Holdings) Co., Ltd. (Nasdaq: FFHL) ("Fuwei Films" or the "Company"), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its unaudited financial results for the three-month and six-month periods ended June 30, 2016.

Second Quarter 2016 Financial Highlights

  • Net sales during the second quarter ended June 30, 2016 were RMB59.3 million or US$8.9 million.
  • Sales of specialty films were RMB23.5 million or US$3.5 million or 39.7% of our total revenues.
  • Overseas sales were RMB11.2 million or US$1.7 million, or 18.9% of total revenues.
  • Our gross profit was RMB5.6 million or US$0.8 million, representing a gross profit margin of 9.5%.

Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "While we continue to face strong competition from emerging and incumbent players in the marketplace, which has led to oversupply relative to demand in the marketplace, we are encouraged by positive trends in the sales of specialty films. We believe our commitment to innovation and R&D has expanded our end-user applications that will enable the Company to capitalize on these opportunities despite challenging industry and economic conditions."

Financial Highlights For The Three Months Ended June 30, 2016

Net sales during the three months ended June 30, 2016 were RMB59.3 million or US$8.9 million, compared to RMB66.7 million during the same period in 2015, representing a decrease of RMB7.4 million or 11.1%, mainly due to a 5.9% decrease in average sales price and a 5.5% decrease of sales volume arising from stronger competition in China. The reduction of average sales price caused a decrease of RMB3.7 million and the sales volume decrease caused a decrease of RMB3.7 million.

In the three months ended June 30, 2016, sales of specialty films were RMB23.5 million or US$3.5 million or 39.7% of our total revenues as compared to RMB21.3 million or 31.9% in the same period of 2015, which was an increase of RMB2.2 million, or 10.3% as compared to the same period in 2015. The reduction of average sales price caused a decrease of RMB0.7 million and the increase in the sales volume caused an increase of RMB2.9 million. The increase was largely attributable to the increase in sales volume.

Overseas sales were RMB11.2 million or US$1.7 million for the three months ended June 30, 2016, or 18.9% of total revenues, compared with RMB15.1 million or 22.7% of total revenues in the second quarter of 2015. The decrease of average sales price caused a decrease of RMB1.4 million and the decrease in sales volume resulted in a decrease of RMB2.5 million.

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):

   

Three-Month Period Ended
June 30, 2016

% of Total

Three-Month Period Ended
June 30, 2015

% of Total

   

RMB

US$

RMB

Sales in China

 

48,106

7,238

81.1%

51,589

77.3%

Sales in other countries

 

11,210

1,687

18.9%

15,120

22.7%

             
   

59,316

8,925

100.0%

66,709

100.0%

Our gross profit was RMB5.6 million or US$0.8 million for the three months ended June 30, 2016, representing a gross margin of 9.5%, as compared to a gross margin of 0.4% for the same period in 2015. Correspondingly, gross margin increased by 9.1 percentage points compared to the same period in 2015. Our average product sales prices decreased by 5.9% compared to the same period last year while the average cost of goods sold decreased by 14.4% compared to the same period last year. Consequently, the amount of decrease in cost of goods sold was larger than that in sales revenue during the three months ended June 30, 2016 compared with the same period in 2015, which resulted in an increase in our gross profit.

Operating expenses for the three months ended June 30, 2016 were RMB14.5 million or US$2.2 million, as compared to RMB13.0 million for the same period in 2015, which was RMB1.5 million, or 11.5% higher than the same period in 2015. This increase was mainly due to depreciation charged to general and administrative expenses in the accounting period in which they are incurred as a result of lack of manufacturing from the third production line since April 2015 and increased allowance for the doubtful accounts receivable.

Net loss attributable to the Company during the three months ended June 30, 2016 was RMB10.2 million or US$1.5 million compared to RMB14.7 million during the same period in 2015, representing a decrease of RMB4.5 million for the same period in 2015.

Basic and diluted net loss per share was RMB0.78 or US$0.12 and RMB1.12 for the three-month period ended June 30, 2016 and 2015, respectively.

Total shareholders' equity was RMB297.37 million or US$44.75 million as of June 30, 2016, compared with RMB319.7 million as of December 31, 2015.

As of June 30, 2016, the Company had 13,062,500 basic and diluted total ordinary shares outstanding.

Financial Highlights for the Six Months Ended June 30, 2016

Net sales during the six months ended June 30, 2016 were RMB121.5 million or US$18.3 million, compared to RMB119.5 million in the same period in 2015, representing an increase of RMB2.0 million or 1.7%, mainly due to the increased sales volume.

In the six months ended June 30, 2016, sales of specialty films were RMB45.3 million or US$6.8 million or 37.3% of our total revenues as compared to RMB36.3 million or 30.4% in the same period of 2015, which was an increase of RMB9.0 million, or 24.8% as compared to the same period in 2015. The reduction in average sales price caused a decrease of RMB2.0 million and the increase in the sales volume caused an increase of RMB11.0 million.

Overseas sales during the six months ended June 30, 2016 were RMB23.7 million or US$3.6 million, or 19.5% of total revenues, compared with RMB28.2 million or 23.6% of total revenues in the same period in 2015. This was RMB4.5 million lower than the same period in 2015. The decrease in average sales price and sales volume caused a decrease of RMB2.1 million and RMB2.4 million, respectively.

Our gross profit was RMB11.2 million or US$1.7 million for the six months ended June 30, 2016, representing a gross margin of 9.2%, as compared to a gross margin of (6.3)% for the same period in 2015. Correspondingly, gross margin increased by 15.5 percentage points. Compared to the same period last year, our average product sales prices decreased by 4.2% while the average cost of goods sold decreased by 18.2%. Consequently, the amount of decrease in cost of goods sold was larger than that in sales revenue during the six months ended June 30, 2016 compared with the same period in 2015, which resulted in an increase in our gross margin.

Operating expenses for the six months ended June 30, 2016 were RMB29.5 million or US$4.4 million, compared to RMB21.8 million in the same period in 2015, which was RMB7.7 million or 35.3% higher. This increase is mainly due to depreciation charged to general and administrative expenses in the accounting period as a result of lack of manufacturing from the third production line since April 2015 and increased allowance for doubtful accounts receivable.

Net loss attributable to the Company during the six months ended June 30, 2016 was RMB22.3 million or US$3.3 million compared to RMB29.6 million during the same period in 2015, representing a decrease of RMB7.3 million due to the factors described above.

Conference Call Information

The Company will host a teleconference on Friday, August 26, 2016, at 9:00 a.m. EDT / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-877-407-9205 in North America, or +1-201-689-8054 internationally, approximately 10 minutes prior to the scheduled start time.

A replay of the call can also be accessed via telephone by calling +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following reply ID: 10078. The replay will be available until September 26, 2016, at 11:59 p.m. EDT.

About Fuwei Films

Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Fuwei Shandong"). Fuwei Shandong develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei's BOPET film is widely used to package food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.

Safe Harbor

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include trends affecting the global economy, including the devaluation of the RMB by China in August 2016; competition in the BOPET film industry; growth of, and risks inherent in, the BOPET film industry in China; uncertainty as to future profitability and our ability to obtain adequate financing for our planned capital expenditure requirements; uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of the risk factors.

For more information, please contact:

In China:
Ms. Xiaoli Yu
Investor Relations Officer
Phone: +86-133-615-59266
Email: fuweiIR@fuweifilms.com

In the U.S.:
Ms. Vivian Chen
Investor Relations
Grayling
Phone: +1-646-284-9427
Email: vivian.chen@grayling.com

Financial Tables to Follow

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2016 AND DECEMBER 31, 2015

(amounts in thousands except share and per share value)

(Unaudited)

 

   

June 30, 2016

 

December 31, 2015

 

RMB

US$

 

RMB

ASSETS

Current assets

         

Cash and cash equivalents

 

8,446

1,271

 

14,355

Restricted cash

 

52,568

7,910

 

43,215

Accounts and bills receivable, net

 

20,925

3,149

 

10,046

Inventories

 

27,930

4,203

 

29,574

Advance to suppliers

 

8,340

1,255

 

5,640

Prepayments and other receivables

 

10,288

1,548

 

20,334

Deferred tax assets - current

 

1,931

291

 

1,438

Total current assets

 

130,428

19,627

 

124,602

           

Property, plant and equipment, net

 

423,987

63,797

 

431,021

Construction in progress

 

3,196

481

 

1,700

Lease prepayments, net

 

17,620

2,651

 

17,882

Advance to suppliers - long term, net

 

1,706

257

 

1,440

Other Assets

 

-

-

 

11,607

Deferred tax assets - non current

 

15,401

2,317

 

15,519

           

Total assets

 

592,338

89,130

 

603,771

LIABILITIES AND EQUITY

Current liabilities

         

Long-term loan, current portion

 

3,350

504

 

3,350

Due to related parties

 

146,247

22,006

 

143,080

Accounts payables

 

32,419

4,878

 

32,760

Notes payable

 

97,230

14,630

 

85,780

Advance from customers

 

1,939

292

 

2,247

Accrued expenses and other payables

7,717

1,161

 

8,682

Obligations under capital leases-current

 

-

-

 

302

Total current liabilities

 

288,902

43,471

 

276,201

           

Long-term loan

 

1,625

245

 

3,300

Deferred tax liabilities

 

5,299

797

 

5,406

           

Total liabilities

 

295,826

44,513

 

284,907

           

Equity

         

Shareholders' equity

         

Registered capital(of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500 issued and outstanding)

 

13,323

2,005

 

13,323

Additional paid-in capital

 

311,907

46,932

 

311,907

Statutory reserve

 

37,441

5,634

 

37,441

(Accumulated deficit) retained earnings

 

(66,274)

(9,972)

 

(44,022)

Cumulative translation adjustment

 

970

147

 

1,049

Total shareholders' equity

 

297,367

44,746

 

319,698

Non-controlling interest

 

(855)

(129)

 

(834)

Total equity

 

296,512

44,617

 

318,864

Total liabilities and equity

 

592,338

89,130

 

603,771

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

(amounts in thousands except share and per share value)

(Unaudited)

               
 

The Three-Month Period Ended June 30,

 

The Six-Month Period Ended June 30,

 

2016

2015

 

2016

2015

 

RMB

US$

RMB

 

RMB

US$

RMB

Net sales

59,316

8,925

66,709

 

121,463

18,276

119,485

Cost of sales

53,690

8,079

66,422

 

110,248

16,589

127,023

               

Gross margin (loss)

5,626

846

287

 

11,215

1,687

(7,538)

               

Operating expenses

             

Selling expenses

3,340

503

3,157

 

6,289

946

6,353

Administrative expenses

11,149

1,678

9,877

 

23,197

3,490

15,490

Total operating expenses

14,489

2,181

13,034

 

29,486

4,436

21,843

               

Operating loss

(8,863)

(1,335)

(12,747)

 

(18,271)

(2,749)

(29,381)

               

Other income (expense)

             

- Interest income

134

20

218

 

352

53

738

- Interest expense

(1,707)

(257)

(2,082)

 

(3,461)

(521)

(4,413)

- Others income (expense), net

175

26

(32)

 

(1,354)

(204)

4,452

               

Total other income (expense)

(1,398)

(211)

(1,896)

 

(4,463)

(672)

777

               

Loss before provision for income taxes

(10,261)

(1,546)

(14,643)

 

(22,734)

(3,421)

(28,604)

Income tax benefit (expense)

64

10

(8)

 

482

73

(1,044)

               

Net loss

(10,197)

(1,536)

(14,651)

 

(22,252)

(3,348)

(29,648)

               

Net (loss) income attributable to non-controlling interests

-

-

-

 

-

-

-

Net loss attributable to the Company

(10,197)

(1,536)

(14,651)

 

(22,252)

(3,348)

(29,648)

Other comprehensive income (loss)

             

- Foreign currency translation adjustments attributable to non-controlling interest

(25)

(4)

-

 

(21)

(3)

-

- Foreign currency translation adjustments attributable to the Company

(74)

(11)

(25)

 

(79)

(12)

(49)

               

Comprehensive loss attributable to non-controlling interest

(25)

(4)

-

 

(21)

(3)

-

Comprehensive loss attributable to the Company

(10,271)

(1,547)

(14,676)

 

(22,331)

(3,360)

(29,697)

               

Loss per share,
Basic and diluted

(0.78)

(0.12)

(1.12)

 

(1.70)

(0.26)

(2.27)

Weighted average number ordinary shares,
Basic and diluted

13,062,500

13,062,500

13,062,500

 

13,062,500

13,062,500

13,062,500

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2016 AND DECEMBER 31, 2015

(amounts in thousands except share and per share value)

(Unaudited)

 

   

June 30, 2016

 

December 31, 2015

 

RMB

US$

 

RMB

ASSETS

Current assets

         

Cash and cash equivalents

 

8,446

1,271

 

14,355

Restricted cash

 

52,568

7,910

 

43,215

Accounts and bills receivable, net

 

20,925

3,149

 

10,046

Inventories

 

27,930

4,203

 

29,574

Advance to suppliers

 

8,340

1,255

 

5,640

Prepayments and other receivables

 

10,288

1,548

 

20,334

Deferred tax assets - current

 

1,931

291

 

1,438

Total current assets

 

130,428

19,627

 

124,602

           

Property, plant and equipment, net

 

423,987

63,797

 

431,021

Construction in progress

 

3,196

481

 

1,700

Lease prepayments, net

 

17,620

2,651

 

17,882

Advance to suppliers - long term, net

 

1,706

257

 

1,440

Other Assets

 

-

-

 

11,607

Deferred tax assets - non current

 

15,401

2,317

 

15,519

           

Total assets

 

592,338

89,130

 

603,771

LIABILITIES AND EQUITY

Current liabilities

         

Long-term loan, current portion

 

3,350

504

 

3,350

Due to related parties

 

146,247

22,006

 

143,080

Accounts payables

 

32,419

4,878

 

32,760

Notes payable

 

97,230

14,630

 

 85,780

Advance from customers

 

1,939

292

 

2,247

Accrued expenses and other payables

7,717

1,161

 

8,682

Obligations under capital leases-current

 

-

-

 

 302

Total current liabilities

 

288,902

43,471

 

276,201

           

Long-term loan

 

1,625

245

 

3,300

Deferred tax liabilities

 

5,299

797

 

5,406

           

Total liabilities

 

295,826

44,513

 

284,907

           

Equity

         

Shareholders’ equity

         

Registered capital(of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500 issued and outstanding)

 

13,323

2,005

 

13,323

Additional paid-in capital

 

311,907

46,932

 

311,907

Statutory reserve

 

37,441

5,634

 

37,441

(Accumulated deficit) retained earnings

 

(66,274)

(9,972)

 

(44,022)

Cumulative translation adjustment

 

970

147

 

1,049

Total shareholders’ equity

 

297,367

44,746

 

319,698

Non-controlling interest

 

(855)

(129)

 

(834)

Total equity

 

296,512

44,617

 

318,864

Total liabilities and equity

 

592,338

89,130

 

603,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

(amounts in thousands except share and per share value)

(Unaudited)

 

   

The Three-Month Period Ended June 30,

The Six-Month Period Ended June 30, 

   

2016

 

2015

2016

 

2015

 

RMB

US$

 

RMB

RMB

US$

 

RMB

Net sales

 

59,316

8,925

 

66,709

121,463

18,276

 

119,485

Cost of sales

 

53,690

8,079

 

66,422

110,248

16,589

 

127,023

                   

Gross margin (loss)

 

5,626

846

 

287

11,215

1,687

 

(7,538)

                   

Operating expenses

                 

Selling expenses

 

3,340

503

 

3,157

6,289

946

 

6,353

Administrative expenses

 

11,149

1,678

 

9,877

23,197

3,490

 

15,490

Total operating expenses

 

14,489

2,181

 

13,034

29,486

4,436

 

21,843

                   

Operating loss 

 

(8,863)

(1,335)

 

(12,747)

(18,271)

(2,749)

 

(29,381)

                   

Other income (expense)

                 

- Interest income

 

134

20

 

218

352

53

 

738 

- Interest expense

 

(1,707)

(257)

 

(2,082)

(3,461)

(521)

 

(4,413)

- Others income (expense), net

 

175

26

 

(32)

(1,354)

(204)

 

4,452

                   

Total other income (expense)

 

(1,398)

(211)

 

(1,896)

(4,463)

(672)

 

777

                   

Loss before provision for income taxes

 

(10,261)

(1,546)

 

(14,643)

(22,734)

(3,421)

 

(28,604)

Income tax benefit (expense)

 

64

10

 

(8)

482

73

 

(1,044)

                   

Net loss

 

(10,197)

(1,536)

 

(14,651)

(22,252)

(3,348)

 

(29,648)

                   

Net (loss) income attributable to non-controlling interests

 

-

-

 

-

-

-

 

-

Net loss attributable to the Company

 

(10,197)

(1,536)

 

(14,651)

(22,252)

(3,348)

 

(29,648)

Other comprehensive income (loss)

                 

- Foreign currency translation adjustments attributable to non-controlling interest

 

(25)

(4)

 

-

(21)

(3)

 

-

- Foreign currency translation adjustments attributable to the Company

 

(74)

(11)

 

(25)

(79)

(12)

 

(49)

                   

Comprehensive loss attributable to non-controlling interest

 

(25)

(4)

 

-

(21)

(3) 

 

-

Comprehensive loss attributable to the Company

 

(10,271)

(1,547)

 

(14,676)

(22,331)

(3,360)

 

(29,697)

                   

Loss per share,
Basic and diluted

 

(0.78)

(0.12)

 

(1.12)

(1.70)

(0.26)

 

(2.27)

Weighted average number ordinary shares,
Basic and diluted

 

13,062,500

13,062,500

 

13,062,500

13,062,500

13,062,500

 

13,062,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

(amounts in thousands except share and per share value)

(Unaudited)

 

   

The Six-Month Period Ended June 30, 

   

2016

 

2015

   

RMB

US$

 

RMB

Cash flow from operating activities

         

Net loss

 

(22,252)

(3,348)

 

(29,648)

Adjustments to reconcile net loss to net cash

         

used in operating activities

         
           

- Depreciation of property, plant and equipment

 

21,364

3,215

 

23,076

- Amortization of intangible assets

 

261

39

 

262

- Deferred income taxes

 

(482)

(73)

 

1,044

- Bad debt recovery (expense)

 

2,197

331

 

(4,135)

-Inventory provision

 

(226)

(34)

 

-

Changes in operating assets and liabilities 

         

- Accounts and bills receivable

 

(13,076)

(1,968)

 

(6,634)

- Inventories

 

1,869

281

 

(4,210)

- Advance to suppliers

 

(2,699)

(406)

 

2,518

- Prepaid expenses and other current assets

 

72

11

 

12

- Accounts payable

 

(341)

(51)

 

(2,439)

- Accrued expenses and other payables

 

(1,045)

(157)

 

1,377

- Advance from customers

 

(308)

(46)

 

2,844

- Tax payable

 

9,974

1,501

 

(1,499)

           

Net cash used in operating activities

 

(4,692)

(705)

 

(17,432)

           

Cash flow from investing activities

         

Purchases of property, plant and equipment

 

(2,722)

(410)

 

(91)

Restricted cash related to trade finance

 

(9,344)

(1,406)

 

5,865

Advanced to suppliers - non current

 

(266)

(40)

 

(550)

Amount change in construction in progress

 

(1,496)

(225)

 

(730)

Return of long-term deposit

 

-

-

 

21,000 

           

Net cash provided by (used in) investing activities

 

(13,828)

(2,081)

 

25,494

           

Cash flow from financing activities

         

Principal payments of bank loans

 

 (1,675)

 (252)

 

(1,675)

           

Proceeds from related party

 

3,167

477

 

13,796

Payment of capital lease obligation

 

(302)

(45)

 

 (4,366)

Change in notes payable

 

11,450

1,723

 

(13,913)

           

Net cash provided by (used in) financing activities

 

12,640

1,903

 

(6,158)

           

Effect of foreign exchange rate changes

 

(29)

(62)

 

(53)

           

Net decrease ( increase) in cash and cash equivalent

 

(5,909)

(945)

 

1,851

           

Cash and cash equivalent

         

At beginning of period

 

14,355

2,216

 

9,020

At end of period

 

8,446

1,271

 

10,871

           

SUPPLEMENTARY DISCLOSURE:

         

Interest paid

 

3,461

521

 

4,413

Income tax paid

 

-

  -

 

-

           

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:

 

2,354

354

 

 2,215

Obligations for acquired equipment under capital lease:

 

-

-

 

4,196

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

(amounts in thousands except share and per share value)

(Unaudited)

 

   

The Six-Month Period Ended June 30,

   

2016

 

2015

   

RMB

US$

 

RMB

Cash flow from operating activities

         

Net loss

 

(22,252)

(3,348)

 

(29,648)

Adjustments to reconcile net loss to net cash

         

used in operating activities

         
           

- Depreciation of property, plant and equipment

 

21,364

3,215

 

23,076

- Amortization of intangible assets

 

261

39

 

262

- Deferred income taxes

 

(482)

(73)

 

1,044

- Bad debt recovery (expense)

 

2,197

331

 

(4,135)

-Inventory provision

 

(226)

(34)

 

-

Changes in operating assets and liabilities

         

- Accounts and bills receivable

 

(13,076)

(1,968)

 

(6,634)

- Inventories

 

1,869

281

 

(4,210)

- Advance to suppliers

 

(2,699)

(406)

 

2,518

- Prepaid expenses and other current assets

 

72

11

 

12

- Accounts payable

 

(341)

(51)

 

(2,439)

- Accrued expenses and other payables

 

(1,045)

(157)

 

1,377

- Advance from customers

 

(308)

(46)

 

2,844

- Tax payable

 

9,974

1,501

 

(1,499)

           

Net cash used in operating activities

 

(4,692)

(705)

 

(17,432)

           

Cash flow from investing activities

         

Purchases of property, plant and equipment

 

(2,722)

(410)

 

(91)

Restricted cash related to trade finance

 

(9,344)

(1,406)

 

5,865

Advanced to suppliers - non current

 

(266)

(40)

 

(550)

Amount change in construction in progress

 

(1,496)

(225)

 

(730)

Return of long-term deposit

 

-

-

 

21,000

           

Net cash provided by (used in) investing activities

 

(13,828)

(2,081)

 

25,494

           

Cash flow from financing activities

         

Principal payments of bank loans

 

(1,675)

(252)

 

(1,675)

           

Proceeds from related party

 

3,167

477

 

13,796

Payment of capital lease obligation

 

(302)

(45)

 

(4,366)

Change in notes payable

 

11,450

1,723

 

(13,913)

           

Net cash provided by (used in) financing activities

 

12,640

1,903

 

(6,158)

           

Effect of foreign exchange rate changes

 

(29)

(62)

 

(53)

           

Net decrease ( increase) in cash and cash equivalent

 

(5,909)

(945)

 

1,851

           

Cash and cash equivalent

         

At beginning of period

 

14,355

2,216

 

9,020

At end of period

 

8,446

1,271

 

10,871

           

SUPPLEMENTARY DISCLOSURE:

         

Interest paid

 

3,461

521

 

4,413

Income tax paid

 

-

-

 

-

           

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:

 

2,354

354

 

2,215

Obligations for acquired equipment under capital lease:

 

-

-

 

4,196