China Rerun Chemical : Trading Statement

China Rerun Chemical Group Ltd



CHINA RERUN CHEMICAL GROUP LTD

("China Rerun", the "Company" or "Rerun")

Third Quarter Trading Update

China Rerun Chemical Group Ltd (CHRR.L), the producer of lubricant products for the domestic automotive, industrial and agricultural markets in the People's Republic of China ("PRC"), reports on trading for the three months to 30 May 2014 (unaudited).

·    Revenues for the period grew by 17.7% to RMB88.3m (Q3 2013: RMB75.0m) largely driven by the underlying growing demand for high quality lubricant oils in the domestic marketplace.

·    Our stated strategic goal to focus on high quality oils enabled higher average selling prices and helped maintain profit margins. The quality and branding upgrades allowed us to pass on price increases to our customers with average selling prices increasing by 25.2% compared to the same period last year. Gross margins increased to 30.0% (Q3 2013: 25.9%).

·   Sales volumes for the year to date have increased by 16.6% to 12,035,133 litres.

·    Distributor numbers have increased by 50% to 42 (Q3 2013: 28) and the quality of our network remains a key focus. We are pleased with the progress made with our distribution partner Tianxia Runyuan (Beijing) Technology Co., Ltd ("Tianxia") in developing a new brand to be sold across 300 new cities. This new brand which includes automotive lubricant oils, is premium and will be sold at higher prices thus enabling strong profit margins. Tianxia focuses largely on long-term, corporate clients who tend to make larger orders. The Company continues to seek new commercial partnerships for joint distribution agreements.

Commenting, Mr Xinghe Wu, Executive Chairman of China Rerun said:

" We are pleased with the progress made in the quarter under review. We have, again, increased revenues and average selling prices with a continued commitment to high quality branded products. We are actively seeking new commercial partnerships and acquisition opportunities, looking to grow our distribution network and increase brand awareness. The Board remains confident that the results for the full year ended 31 August 2014 will be in line with its expectations."

Indicative exchange rate as at 3 July 2014:  £1: RMB10.56

Source : www.oanda.com

For enquiries, please visitwww.chinarerun.com/or contact :

China Rerun	Xinghe Wu Yan Liu Nick Lyth	[phone] www.chinarerun.com/ [phone]
Cairn Financial Advisers LLP (Nominated Adviser)	Jo Turner Liam Murray	[phone]
Beaufort Securities Limited (Broker)	Chris Rourke	[phone]
Cardew Group (Financial PR)	Shan Shan Willenbrock Georgina Hall Tom Horsman	[phone] [e-mail].

Notes to Editors

China Rerun Chemical Group Ltd is an established and profitable producer of lubricant products for the PRC's domestic automotive, industrial and agricultural markets.  Based in Daqing, northeastern China, it operates principally under the ''Runyuan'' and ''Black E'' brands. The Group's products are sold to end users through a network of third party distributors, some of whom operate branded automotive garages.

This information is provided by RNS

The company news service from the London Stock Exchange

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