QIAO XING UNIVERSAL RESOURCES, INC. 
By HUIZHOU, China, May 31, 2011 /PRNewswire-Asia-FirstCall/ -- Qiao Xing Universal Resources, Inc. (NASDAQ: XING) ("XING" or the "Company"), a leading company in the molybdenum mining business as well as a company with substantial assets in the resources industry, today announced its unaudited consolidated financial results for the fiscal year ended December 31, 2010.
"Our mining operations grew significantly in 2010 as our mining operations began to contribute significantly to our financial results. Furthermore, we completed two additional mine acquisitions at the end of 2010 and these two operational and producing mines will contribute substantially in 2011," stated Mr. Ruilin Wu, the Company's Chairman and Chief Executive Officer. "As seen by the impressive rise in revenue and net income in 2010, we are continuing to implement our strategy of becoming a pure-play resources company even as we work to finalize our options as relates to our remaining telecommunications business."
In fiscal 2010, the Company generated strong results from its mining business with revenues of RMB300.4 million (US$45.5 million), compared to RMB193.9 million in fiscal 2009, and net income in fiscal 2010 of RMB 90.6 million (US$13.7 million) compared to RMB64.2 million in fiscal 2009. This represents an increase in mining revenues and net income of 55% and 41%, respectively. Meanwhile, the Company's 56% owned subsidiary, Qiao Xing Mobile Communication Co., Ltd. ("QXM"), strategically contracted its mobile phone business due to an unfavorable competition environment so as to limit its operating losses as it assesses its corporate options. Due to the operating losses attributable to its QXM subsidiary, the Company recorded a net loss of RMB 57.3 million (US$8.7 million) on a consolidated basis, compared to a consolidated net loss of RMB 259.9 million in 2009. As of December 31, 2010, the Company had cash and equivalents of RMB 3,178.1 million (US$481.5 million) on its consolidated balance sheet.
During the past year, the Company completed two acquisitions: (1) The acquisition of a 100% equity interest in Balinzuo Banner Xinyuan Mining Co., Ltd. ("Xinyuan"), which owns a mine with estimated ore reserves of 9,749,000 tons which primarily contains lead, zinc and copper, and; (2) the acquisition of a 34.53% equity interest in Chifeng Aolunhua Mining Co., Ltd. ("Aolunhua"). Aolunhua owns a copper-molybdenum mine with reserves of 372.9 million tons of ore that contains molybdenum metal, copper and silver. XING recently completed all of its financial purchase obligations for these two mining assets. The Company also owns the right to receive the expected residual returns from Chifeng Haozhou Mining Limited ("Haozhou") with estimated proven reserves of 30,985 tons of molybdenum metal (at an average grade of 0.40%) and reserves of other minerals. With available current cash on hand and operating cash flow to be generated by its diversified mining assets, the Company believes that it is well positioned to optimize the operation of its mining business as well to increase its presence in the resources industry in 2011 and beyond.
XING is continuing to assess the various alternatives available to it in terms of divesting of its QXM subsidiary. The Company will seek to announce its strategy as to QXM concurrent with its filing of its Form 20-F in June 2011. The Company's strategic plan is to optimize the operation of its mining assets, acquire future high potential mining assets and to become a pure resources company. The Company believes that its state-of-the-art mining operations, its management expertise and its acquisitions strategy will enable it to generate a high return on its assets as it seeks to maximize value for shareholders.
Unaudited consolidated balance sheets as of December 31, 2010 and 2009, as well as unaudited statements of operations for the years ended December 31, 2010, 2009 and 2008 are as follows:
QIAO XING UNIVERSAL RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2010
2009 2010
---- ----
RMB'000 RMB'000 US$'000
ASSETS
------
Current assets:
Cash and cash equivalents 3,709,503 3,178,156 481,539
Restricted cash 251,720 37,758 5,720
Accounts receivable, net 123,082 247,953 37,569
Inventories 98,012 61,848 9,371
Prepaid expenses 184,339 87,174 13,208
Other current assets 37,025 37,112 5,623
Due from related parties 25 24 4
Deferred income taxes-
current 15,942 - -
Assets held for sale 163,000 - -
Due from discontinued
operations 200,000 - -
Total current assets 4,782,648 3,650,025 553,034
Property, machinery and
equipment, net 170,485 269,895 40,893
Proven and probable reserves 712,121 672,610 101,911
Construction in progress 86,591 61,824 9,367
Investment at cost 5,000 184,860 28,009
Goodwill 82,058 - -
Value beyond proven and
probable reserves 67,295 67,295 10,196
Other acquired intangible
assets, net 4,433 - -
Acquisition deposit - 352,800 53,455
Deferred income taxes-
noncurrent - 1,143 173
Total assets 5,910,631 5,260,452 797,038
========= ========= =======
LIABILITIES
Current liabilities:
Short-term bank borrowings 884,708 446,000 67,576
Accounts payable 60,750 40,349 6,114
Other payables 57,238 100,881 15,285
Accrued liabilities 40,472 25,237 3,824
Deposits received 1,310 1,310 198
Deferred revenues 16,370 3,902 591
Due to related parties 5,118 9,324 1,413
Taxation payable 15,016 15,912 2,411
Embedded derivative liability 63,096 20,113 3,047
Convertible notes 233,716 112,162 16,994
Assets retirement obligation 4,013 10,837 1,642
Deferred income taxes-
current - 1,421 215
Total current liabilities 1,381,807 787,448 119,310
Shareholders' loans 6,732 6,509 986
Warrants liabilities 148,921 69,831 10,580
Deferred income taxes-
noncurrent 175,281 167,258 25,343
------- ------- ------
Total liabilities 1,712,741 1,031,046 156,219
--------- --------- -------
Commitments and contingencies
SHAREHOLDERS' EQUITY
XING equity:
Common stock, par value
RMB0.008 602 693 104
(equivalent of US$0.001);
authorized
200,000,000 shares as of
December
31, 2009 and 2010;
outstanding and
fully paid -82,327,993 as of
December
31, 2009 and 95,802,363 as of
December 31,2010
Additional paid-in capital 2,404,998 2,627,793 398,151
Retained earnings 796,736 728,646 110,401
Cumulative translation
adjustments (160,532) (154,218) (23,366)
-------- -------- -------
Total XING equity 3,041,804 3,202,914 485,290
Noncontrolling interest 1,156,086 1,026,492 155,529
--------- --------- -------
Total equity 4,197,890 4,229,406 640,819
--------- --------- -------
Total liabilities and
shareholders' equity 5,910,631 5,260,452 797,038
========= ========= =======
The accompanying notes are an integral part of these consolidated
financial statements.
QIAO XING UNIVERSAL RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
2008 2009
---- ----
RMB'000 RMB'000
Net sales 2,153,873 1,826,799
Cost of goods sold (1,287,096) (1,474,930)
---------- ----------
Gross profit 866,777 351,869
Operating expenses:
Selling expenses (146,551) (110,444)
General and
administrative
expenses (59,794) (114,807)
Research and
development (29,242) (36,404)
Amortization of
acquired intangible
assets (11,727) (4,733)
Impairment of assets
held for sale - (5,957)
Impairment of goodwill - -
Impairment of acquired
intangible assets (26,235) (13,600)
Income from operations 593,228 65,924
Interest income 54,821 28,641
Exchange (loss) gain,
net (16,971) 406
Interest expense (311,710) (222,804)
(Loss) gain on
remeasurement of
embedded derivatives 160,036 (8,258)
Gain on disposal of
interests in
subsidiaries 2,269 -
Gain (loss) on issue/
repurchase of stocks
by subsidiaries 4,351 -
Gain (loss) on
extinguishment of
convertible notes (10,634) (15,261)
Impairment of
investment at cost - (2,802)
Unrealized gain (loss)
on derivatives - (4,673)
Other income (loss),
net (3,700) 166
------ ---
Income (loss)from
continuing operations
before income tax 471,690 (158,661)
Provision for income
tax (155,717) (43,939)
-------- -------
Income (loss) from
continuing operations,
net of tax 315,973 (202,600)
Discontinued
operations, net of tax (290,953) (139,782)
Net income (loss)for
the year 25,020 (342,382)
Net (income) loss
attributable to the
noncontrolling
interest (161,814) 82,486
------
Net income (loss) (136,794) (259,896)
======== ========
Other comprehensive
income (loss) -
Translation
adjustments (33,815) (85,883)
------- -------
Comprehensive income
(loss) (170,609) (345,779)
======== ========
Basic earnings (loss)
per common share:
Continuing operations 4.98 (1.91)
Discontinued operations (9.40) (2.22)
Extraordinary gain
Total (4.42) (4.13)
===== =====
Diluted earnings (loss)
per common share:
Continuing operations 3.51 (1.91)
Discontinued operations (9.40) (2.22)
Extraordinary gain
Total (5.89) (4.13)
===== =====
Weighted average number
of shares outstanding
Basic 30,949,000 62,837,000
========== ==========
Diluted 30,949,000 62,837,000
========== ==========
Amounts attributable to
shareholders RMB'000 RMB'000
Income (loss) from
continuing operations,
net of taxes 154,159 (120,114)
Discontinued
operations, net of
taxes (290,953) (139,782)
Net income (loss) (136,794) (259,896)
======== ========
2010
----
RMB'000 US$'000
Net sales 1,155,942 175,143
Cost of goods sold (1,077,857) (163,312)
---------- --------
Gross profit 78,085 11,831
Operating expenses:
Selling expenses (112,832) (17,096)
General and
administrative
expenses (69,843) (10,582)
Research and
development (18,943) (2,870)
Amortization of
acquired intangible
assets (4,433) (672)
Impairment of assets
held for sale - -
Impairment of goodwill (82,058) (12,433)
Impairment of acquired
intangible assets - -
Income from operations (210,024) (31,822)
Interest income 24,357 3,690
Exchange (loss) gain,
net (4,090) (620)
Interest expense (46,894) (7,105)
(Loss) gain on
remeasurement of
embedded derivatives 19,006 2,880
Gain on disposal of
interests in
subsidiaries - -
Gain (loss) on issue/
repurchase of stocks
by subsidiaries - -
Gain (loss) on
extinguishment of
convertible notes 10,025 1,519
Impairment of
investment at cost - -
Unrealized gain (loss)
on derivatives 48,745 7,386
Other income (loss),
net (1,468) (222)
------ ----
Income (loss)from
continuing operations
before income tax (160,343) (24,294)
Provision for income
tax (47,847) (7,250)
------- ------
Income (loss) from
continuing operations,
net of tax (208,190) (31,544)
Discontinued
operations, net of tax - -
Net income (loss)for
the year (208,190) (31,544)
Net (income) loss
attributable to the
noncontrolling
interest 150,808 22,850
------- ------
Net income (loss) (57,382) (8,694)
======= ======
Other comprehensive
income (loss) -
Translation
adjustments 6,314 957
----- ---
Comprehensive income
(loss) (51,068) (7,737)
======= ======
Basic earnings (loss)
per common share:
Continuing operations (0.63) (0.10)
Discontinued operations
Extraordinary gain
Total (0.63) (0.10)
===== =====
Diluted earnings (loss)
per common share:
Continuing operations (0.63) (0.10)
Discontinued operations
Extraordinary gain
Total (0.63) (0.10)
===== =====
Weighted average number
of shares outstanding
Basic 91,179,000 91,179,000
========== ==========
Diluted 91,179,000 91,179,000
========== ==========
Amounts attributable to
shareholders RMB'000 US$'000
Income (loss) from
continuing operations,
net of taxes (57,382) (8,694)
Discontinued
operations, net of
taxes - -
Net income (loss) (57,382) (8,694)
======= ======
Foreign Exchange Rate Used
The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of the amounts from Renminbi (RMB) into United States dollars for the convenience of readers were calculated at the noon purchase rate of US$1.00 = RMB6.60 on December 31, 2010 in New York City for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into U.S. Dollars at that rate on December 31, 2010, or on any other specific date. The percentages stated are calculated based on RMB.
About Qiao Xing Universal Resources, Inc.
Qiao Xing Universal Resources, Inc. is a leading player in the molybdenum mining industry with substantial assets in the resources industry. XING focuses on mining and processing rare metal ores and several strategically important base-metal ores, including molybdenum, copper lead and zinc. XING currently owns a 100% equity interest in Balinzuo Banner Xinyuan Mining Co., Ltd. and a 34.53% equity interest in Chifeng Aolunhua Mining Co., Ltd, as well as the right to receive 100% of the expected economic residual returns from Chifeng Haozhou Mining Co., Ltd.
XING was one of the first Chinese companies to be listed on NASDAQ (in 1999) as one of the leading players in the telecommunication-terminal product business in China. In 2007, XING made the strategic decision to diversify into the resources industry. Since then, XING has made several acquisitions in the resources industry and divested its fixed-line and budget mobile phone businesses. To reflect this change, XING changed its corporate name to Qiao Xing Universal Resources, Inc., effective January 28, 2010.
XING is well positioned to optimize the operation of its mining business as well to increase its presence in the resources industry in 2011 and beyond. XING will continue to seek opportunities to acquire future high potential mining assets. At the same time, XING is also working to divest its remaining mobile-phone business to become a pure-play resources company.
Cautionary Note Regarding Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These include statements about our expectations, plans, objectives, assumptions, performance or future events. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "estimate," "plans," "potential," "projects," "continuing," "ongoing," "expects," "management believes," "we believe," "we intend" and similar expressions. These statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed. You should not place undue reliance on these forward-looking statements. Forward-looking statements include all statements other than statements of historical facts, such as statements regarding the Company's plans to improve efficiencies in the day-to-day operations of its mines, the Company's plans to enhance production processes and management efficiencies, the Company's plans to develop more efficient production processes for molybdenum exploration and extraction and the Company's transition to a pure resources company and bigger player within the resources industry. Readers are cautioned that forward-looking statements are not guarantees of future performance and actual results may differ materially from those projected, anticipated or assumed in the forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Information regarding these factors is included in our filings with the SEC. The Company does not undertake any obligation to update any forward-looking statements. All information provided in this press release is as of May 31, 2011.
Company Contact:
Qiao Xing Universal Resources
Rick Xiao, Vice President
Phone: +86-752-282-0268
Email: rick@qiaoxing.com
USA IR Agency Contacts:
CCG Investor Relations Inc.
Mabel Zhang, Associate Partner
+1 310-954-1383
Email: mabel.zhang@ccgir.com
David Rudnick, Account Manager
+1 646-626-4172
Email: david.rudnick@ccgir.com
SOURCE Qiao Xing Universal Resources, Inc.
