China Shuangji Cement (PINK:CSGJ)

ZHAOYUAN CITY, China, Dec. 16, 2010 /PRNewswire-Asia/ -- China Shuangji Cement, Ltd., announced that its Dongfang cement plant on Hainan Island, which it previously announced was on a published list of more than 2,000 production lines across China that the Ministry of Industry and Information Technology (MIIT) wanted to phase out due to concerns over outmoded production methods, has been granted a long-term extension of its operating license until after a new state of the art 2,000,000 MT cement plant is completed and fully operational.

"We have been working closely with both the Hainan government and PRC national authorities to resolve this matter so that it is mutually beneficial for all our stakeholders including our shareholders, employees, suppliers, customers, and also the people and businesses of Hainan Province who depend on our high quality cement for their construction needs. Everyone is very pleased by this outcome," said Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. "Under this agreement, we will be able to keep our Dongfang production line open, which has a current annual capacity of 500,000 MT, until after we have constructed a new modern cement plant."  Mr. Song added, "We are presently negotiating with several banks and commercial funders to secure interest only loans for the money needed to build this new plant and are confident that we will be able to secure the funds on commercially competitive terms."

Mr. Song continued, "Hainan Province is growing rapidly and has gained significant strength and prosperity with many new real estate projects and infrastructures projects being planned.  Once completed, this new, state-of-the-art 2,000,000 MT cement facility in Dongfang, Hainan Province, will have an annual capacity 4 times greater than the capacity of the present plant.  This will greatly assist us in our goal to become one of the top suppliers of high-grade bulk cement in China."  

Once this new plant is online and fully operational, China Shuangji's total annual production run rate will be roughly 4,500,000 tons which would roughly equate to $180 million in sales and about $15 million in profits.

GeoTeam® Note: This is an important development as it takes one layer of uncertainty, we discussed in a recent screen article, off the table.   However, we are still awaiting the final results of a financial restatement issue, especially as it relates to tax liabilities.

ZHAOYUAN CITY, China, Dec. 2, 2010 /PRNewswire-Asia/ -- China Shuangji Cement, Ltd., a leading producer of high-quality Portland cement in Shandong and Hainan Provinces in the People's Republic of China (PRC), announced that it recently held an opening ceremony for its new 1,000,000 metric ton cement plant in Zhaoyuan City and has started to ramp up production. The official ribbon cutting was attended by local dignitaries including Zhaoyuan City Mayor Mr. Wei Zhang and Party Secretary Mr. Shaoning Xu as well as China Shuangji's employees, suppliers, customers, and other industry officials.

"On behalf of China Shuangji Cement's shareholders, employees, customers and suppliers, I would like to thank Mayor Wei Zhang and Party Secretary Shaoning Xu and all the other local government representatives who helped make completion of this project a reality.  I would also like to especially thank Mr. Jiping Wen, the individual investor who loaned us $3.7 million to complete our purchases and installations of state-of-the-art cement manufacturing equipment," said Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. "The Chinese economy is growing rapidly and spending on new construction and infrastructure projects are increasing the need for cement. Opening our new modern cement facility better positions us to benefit from this trend and is a key step in our strategy to become a major cement player in China and the leading supplier of high-grade bulk cement in both Shandong and Hainan provinces."

China Shuangji's new Zhaoyuan City cement plant, which is located approximately five miles from the Company's former facility, has direct access to a new highway that leads to many of its customers and to nearby ports for transportation. The new facility is equipped with modern production lines as well as advanced testing equipment. Once operating at full capacity, the Company expects its Zhaoyuan City cement facility will increase its production capacity by approximately 66% to 2,500,000 MT per year.  As a result, the Company expects that its revenue run rate and profit will be approximately 66% higher than it is currently.

"Zhaoyuan City is pleased to have been able to assist China Shuangji with this project," said Wei Zhang, Mayor of Zhaoyuan City.  "China Shuangji is a valued and trusted partner in our community and the opening of its new cement facility is truly a win-win for all parties involved."

Third Quarter 2010 Highlights

• Total revenue increased 7% to $15.1 million from $14.1 million a year ago.  

• Gross profit increased 36% to $2.1 million from $1.5 million a year ago.

• Gross margin increased to 14% from 11% in the same period last year.

• Operating expenses were $429,717, up from $100,846 in the same period last year.

• Operating income rose 15% to $1.7 million from $1.4 million a year ago.

• Net income declined 21% to $567,840 compared to $715,504 a year ago.

• Working capital increased 16% to $12.4 million at September 30, 2010, from $10.7 million at December 31, 2009.

• GAAP EPS was $0.01 vs. $0.02

• Shareholders' equity increased to $29.6 million at September 30, 2010, from $26.1 million at December 31, 2009.

• Moved closer to completing new 1,000,000 metric ton Zhaoyuan Cement production facility and began final testing of equipment.

GeoTeam Note: 2010 Net income was impacted by impairment loss on assets held for sale of ($810,056).  Adjusting for this issue yields EPS of $0.04

Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd, stated, "We are pleased with the solid revenue increases and the 36% increase in gross profit in the third quarter. Our temporary decline in net income was primarily due to a non-recurring one-time impairment charge on assets held for sale and we expect to continue to realize increases in net income going forward." He added, "We are now closer towards completing our new, state-of-the-art cement factory in Zhaoyuan City, which should be in full production by the end of the year. Management expects this will dramatically increase the sales and profits of China Shuangji for 2011 and beyond and add material value to this Company."

China Shuangji Cement, Ltd. announced today that it will soon begin rapidly growing sales and profits as its new Zhaoyuan City cement plant ramps up production.

As previously announced, China Shuangji expects that this new state-of-the-art cement plant will be operational by the end of the first week of October. This new cement plant in Zhaoyuan City, which is located approximately five miles from the Company's former facility, has a 1,000,000 metric ton capacity with direct access to a new highway that leads to many of China Shuangji's customers as well as to nearby ports. The Company currently produces about 1,500,000 MT of high-quality Portland cement from two facilities in Hainan province and one other facility in Shandong province. China Shuangji expects that its new Zhaoyuan cement plant will increase its production capacity by approximately 66% to 2,500,000 MT once it is fully operational, resulting in a commensurate increase in both sales and profits.

"Now that all the equipment is installed and operational, we are working to quickly ramp up cement production at our new Zhaoyuan City facility and bring it to full capacity by the end of the year," said Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. "We continue to see growth in the building sector in China, especially where we operate in Shandong and Hainan provinces. Increasing demand is being driven by construction of new buildings, bridges and infrastructure, fueled by government incentives and also from organic growth throughout the areas in which we operate." Added Mr. Song, "We are very excited to be shifting into this new and exciting rapid growth mode and are confident that there will be more than enough demand to continue to absorb all of our new production. I want to thank all of our stakeholders for their patience and support including the government of Zhaoyuan City, our customers, employees, and our shareholders."

China Shuangji Cement, Ltd. announced today that the Company is moving closer towards completion of its new Zhaoyuan Cement Production Facility and reiterated its growth outlook.

"Once completed, our production capacity will increase approximately 66% over our current level and we are already seeing strong interest from local contractors to buy cement from this plant once it starts producing cement," stated Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. "We are very excited that we received the capital to complete this project. While the exact completion date is contingent upon how quickly the equipment is integrated and tested, we expect to be operational by the first week of October."

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Second Quarter 2010 Highlights 

• Total revenue increased 11.5% to $15.3 million from $13.7 million a year ago.
  
• Gross profit increased 14.0% to $2.4 million from $2.1 million a year ago.
  
• Operating income rose 7.9% to $1.7 million from $1.6 million a year ago.
  
• Net income rose to $1.14 million compared to $1.13 million a year ago, an increase of $8,801.
  
• GAAP EPS was $0.04 vs. $0.04.
  
• Shareholders’ equity increased to $28.6 million at June 30, 2010, from $26.1 million at December 31, 2009.
  
• Secured $3.7 million “conventional” loan from a Chinese investor to complete construction of new modern cement factory. This loan is not convertible and does not have any warrants. It has a 10 year term and has a 10% interest rate with principal to be repaid when the loan is due.

GeoTeam non-GAAP adjustment results in EPS of $0.07 vs. $0.04.

“We experienced strong sales in the second quarter as a result of increased production from our cement plant in Longkou and rising demand for our high-grade bulk cement due to the construction of new buildings, roads, and other infrastructure projects,” commented Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. “This resulted in a 14% increase in gross profit as we continued to sell all of the cement we produced. During the quarter, we also secured a non-convertible $3.7 million loan that we are using to complete the construction of our new, state-of-the-art cement factory in Zhaoyuan City. This will allow us to increase our production capacity by 1,000,000 metric tons, or roughly 66%, to an estimated 2,500,000 metric tons per year. We are already seeing strong interest from local contractors to buy cement from this plant and more than enough demand to absorb all of our anticipated new production.”

Business Outlook

“We are very excited about our prospects for the remainder of 2010 and beyond as China’s economy continues to expand,” said Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. “We see significant growth in construction and infrastructure projects in the fast growing areas where we operate, Shandong and Hainan provinces. This is supported by the government’s $586 billion stimulus package that calls for substantial investments in cement intensive projects for many years to come and the closure of outdated cement facilities. Going forward, we are excited about our prospects and have positioned ourselves to take advantage of these conditions as we complete equipment installation our new 1,000,000 metric ton cement plant and get ready to bring this facility online. We believe that our expected 66% increase in production capacity should translate into a commensurate increase in our sales and profits."

Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures. The GeoTeam® non-GAAP figures apply a 25% and 36% tax rate for Chinese and United States companies respectively.

China Shuangji Cement, Ltd. said today that it is anticipating that a new round of adjustment in the Chinese cement industry that is expected to be announced by the government will further drive industry growth.

According to a July 28 report in China’s Economic Information Daily, a key publication sponsored by the Xinhua News Agency, the government’s new Cement Industry Development Policy has now been finalized, and industry insiders believe that a new round of measures encouraging larger enterprises to merge and further eliminate backwards production is about to be unveiled. The Chinese government has already taken measures to consolidate the cement industry, eliminating inefficient low-grade cement plants and phasing out smaller producers in order to retire “aged” production facilities. The amended Policy, according to the report, is expected to accelerate industry consolidation in the second half of 2010, quickening the pace of cement industry mergers and acquisitions and benefiting larger cement producers as well as the entire industry. According to the report, the Policy is expected to encourage new methods of dry cement production and to require more stringent equipment standards for cement producers in order to further upgrade and structurally optimize the industry by 2015. By that time, the top ten cement producers are expected to account for 35% of China’s projected cement output of 2.04 billion metric tons, based on preliminary estimates, compared to 22.6% of the country’s 1.63 billion ton output in 2009.

“We expect the PRC Government’s policy to be a boon to the cement industry in China and to increase demand for our cement as smaller, more inefficient producers continue to shut down and government and local customers require more cement for new infrastructure, housing and other projects,” said Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. “This is being supported by the government’s $586 billion economic stimulus package, which has increased projects involving steel, aluminum, and cement, as well as measures to boost rural consumption by subsidizing procurement of building materials.” Concluded Mr. Song, “We are already seeing increased interest from local contractors to buy our cement and have received a 10 year $3.7 million 10% interest loan* that will allow us to complete our new modern cement facility in Zhaoyuan City, which is expected to increase our production capacity by 1,000,000 metric tons to an estimated 2,500,000 metric tons per year. This will solidify our position as a major cement player in fast growing Shandong and Hainan Provinces.”

*The $3.7 million loan is not convertible into stock and does not have warrants.

“We are very confident about our prospects in 2010 based on strong demand from China’s construction industry and significant growth in infrastructure projects that we are observing,” said Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. “This is supported by a surging economy and the government’s $586 billion stimulus program, which calls for substantial investments in cement-intensive projects for years to come.” Added Mr. Song, “We have moved past a challenging economic period and are now on a course for sustained improvement in 2010, supported by the rebound in China’s economy and its prospects for significant future growth. Once our new Zhaoyuan Cement Production Facility becomes fully operational, which we expect to occur this year, we will be able to increase our production capacity by 1,000,000 metric tons to an estimated 2,500,000 metric tons. We believe this, combined with consolidation in our industry and the growth of China’s cement market, will drive significant increases in sales and profits for many years to come.”

Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd., commented, “China's construction industry continues to experience strong demand for new buildings and infrastructure, resulting from the country’s strong economic growth in the first quarter and positive outlook for the remainder of 2010 and beyond. The growth in infrastructure projects that we see is supported both by a surging economy and the government’s $586 billion stimulus program, which calls for significant investments in cement intensive projects for many years to come.”

“We have moved beyond the challenging 2008-2009 economic period and are charting a course to a sustained recovery and improved outlook for 2010, which is supported by the government’s economic statistics,” said Mr. Jun Song, CEO of China Shuangji Cement, Ltd. “China Shuangji is poised to take advantage of the strong rebound in China’s economy as we bring our new 1,000,000 metric ton cement plant online and increase our capacity by nearly 70% and drive significant growth in revenues and profits.”