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China Valves Tech (NASDAQ:CVVT)

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Tuesday, May 8, 2012

Second Quarter 2012 Results

Total revenue was $38.4 million, down 8.4% from $42.0 million in the same quarter last year.
Net income for the three months ended March 31, 2012 was $1.8 million, compared to $7.6 million for the same quarter in 2011. Diluted earnings per share were $0.05, compared to diluted earnings per share of $0.21 for the same period in 2011.

Mr. Jianbao Wang, Chief Executive Officer of China Valves, commented, "We experienced a weak quarter due to unfavorable economic conditions and tight liquidity conditions that inhibited capital projects. Despite these challenges, we remain confident in our ability to achieve our guidance for fiscal year 2012."

Business Outlook

China Valves reiterates its guidance for fiscal year of 2012, expecting to achieve top-line growth in the low teens and expecting gross margins to fluctuate in the range of 35% to 37% depending on shifts in product mix. It should be noted that these estimates are based on current conditions and are subject to revision based on the uncertainty in the global economy and range of potential policy responses and monetary actions by China's central government.

"In the second half of fiscal 2012, we will continue to focus on generating more sales and collecting account receivable. We expect to achieve significant revenue growth in the second half of fiscal 2012 compared to the first half. We are in negotiations to secure a longer term credit facility which would also help us with fluctuations in the payment cycle of our larger, state-owned enterprise customers. We continue to work towards building a dominant position in China's highly fragmented industrial valve industry and create sustainable value for our shareholders," said Mr. Wang.

Thursday, February 9, 2012

First Quarter 2012 Results

Net revenue reached $55.7 million, up 6.5% from $52.3 million for the same period last year
Gross profit was $20.3 million, up 10% compared to $18.4 million for the same period last year
Net income was $8.2 million, or $0.23 per fully diluted share, compared to $6.4 million, or $0.18 per fully diluted share, for the same period of 2010

"We believe that our results for the first quarter of Fiscal 2012 are quite satisfactory, especially against the background of tighter credit conditions and constrained infrastructure investment during recent months in China. We are pleased to see modest improvement in gross margin due to a favorable product mix and better operating margins reflecting tighter integration of our subsidiaries. This contributed to a 28% increase in our earnings per share as compared to the prior year period," said Mr. Jianbao Wang, Chief Executive Officer of China Valves. "We continue to experience heightened accounts receivables and will redouble our efforts to improve collections as bank credit policies become more accommodative. Our technology leadership in high performance valves was validated by recent qualifications for ultra-supercritical thermal power valves and nuclear safety valves by the relevant government bodies, and by our designation as the only National Corporate Technology Center for the Chinese valve industry. We believe that our strong level of recognition within our industry positions China valves to participate in the growth of high value markets and displace more expensive imported products."

Business Outlook

For the balance of fiscal 2012, China Valves expects to achieve top-line growth in the low double digits, reflecting continued strong demand in the power generation and petrochemical segments, balanced by some temporary softness in the water and infrastructure segments due to a more modest pace of real estate development. The company expects gross margins to fluctuate in the range of 35% to 37% depending on shifts in product mix, and will continue its efforts to carefully manage operating expenses. It should be noted that these estimates are based on current conditions and are subject to revision based on the uncertainty in the global economy and range of potential policy responses and monetary actions by China's central government.

"In 2012 we will continue to focus on building a company that can achieve a dominant position in China's highly fragmented industrial valve industry and create sustainable value for our shareholders. We are very encouraged by our recent designation as the only National Corporate Technology Center for the valve industry by the Chinese government. Over the next few years, we intend to expand our portfolio of intellectual property and introduce solutions that can favorably compete with the most advanced international competitors. We believe that China's ongoing urbanization and industrialization create an attractive growth environment. The extensive qualification process gives us the opportunity to achieve attractive margins on our high performance products," said Mr. Wang.

Friday, November 25, 2011

ZHENGZHOU, China, November 23, 2011 /PRNewswire-Asia-FirstCall/ -- China Valves Technology, Inc. (NASDAQ: CVVT) ("China Valves" or the "Company"), a leading Chinese metal valve manufacturer, today announced that Henan Tonghai Fluid Equipment Co., Ltd., China Valves' PRC holding company, has been recognized as a National Corporate Technology Center by an array of China's regulatory and government agencies. China Valves is the only company that has received this recognition in China's valve industry. Normally China Central Government entitles one single National Corporate Technology Center for one industry.

The selection process consisted of various factors such as a company's patents, its research & development ("R&D") team, its R&D investments, its R&D equipments and its tax-related legal compliance, its R&D co-operation with outside institutes and universities, among other factors. As a National Corporate Technology Center, China Valves is eligible to benefit from certain preferred policies from the Chinese government agencies that determined this recognition, which are the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation.

"This unique acknowledgement validates our leading position in China's valve industry, as our six subsidiaries, each with specific product applications, are all leaders in their respective target markets," said Mr. Jianbao Wang, Chief Executive Officer of China Valves. "Meanwhile, this recognition also represents our great efforts in R&D of high gross margin products in these years. With this platform we have more responsibility and duty to localize high end valves to help the construction of the key projects in China. In addition, we will also expect to receive more government support such as fund appropriation from central government, provincial government and municipal governments, tax benefits, possible preferred land use right and other subsidies. "

Tuesday, November 15, 2011

Third Quarter 2011 Results

Net revenue reached $61.8 million, up 11.7% from $55.3 million for the same period last year
Gross profit was $24.4 million, compared to $25.1 million for the same period last year
Net income was $11.2 million, or $0.31 per fully diluted share, compared to $15.9 million, or $0.45 per fully diluted share, for the same period of 2010

"For the three months ended September 30, 2011, we continued to experience a slowdown in sales growth due to a general slowdown of China's economy which delayed orders and pushed back delivery schedules. The completion of large projects during the quarter and our expanded sales to the petrochemical and oil and gas sectors were partially offset by a decrease in sales to the water supply sector, mainly due to unfavorable development of investments in the sector because of the tight liquidity in China during the period. Our gross margin continued to narrow as increased raw material and labor costs and higher operating expenses strained our operating performance," said Mr. Jianbao Wang, Chief Executive Officer of China Valves. "While we are pleased with the growing amount of larger orders, of which the success of our 24-way rotary valves warrants particular mention, the more complex projects have lengthened collection times, increasing our account receivables balance. In light of China's tighter credit environment, we continue to monitor our bidding and collection practices in order to maintain a healthy operating cash flow."

Business Outlook

The Company focuses on improving profitability through the consolidation of sales and raw material procurement functions between its different subsidiaries and by emphasizing technological expertise to win larger projects. While the Company expects the power generation and petrochemical and oil sectors to remain the largest contributors to sales, a slowdown of China's economy in combination with a tighter credit policy may delay orders and lengthen the sales cycle.

"Looking forward to 2012, we expect to further strengthen the cooperation between our operating subsidiaries to take advantage of synergies in the sales network and improve production efficiency. Improving our research and development capabilities are of particular importance as we strive to develop our product offerings, expand our project scopes and strengthen our competitive advantages against both domestic and international valve players in niche markets. We continue to monitor our high account receivables, which we believe are a systemic issue in our industry given the current market conditions, and work to further improve our collection practices," said Mr. Wang. "Due to the current uncertain macro-economic outlook and persistent inflation, we maintain a conservative stance regarding our growth and margin development in the current fiscal year. We expect to provide more detailed guidance in terms of our fiscal year 2012 performance as we have more visibility."

Tuesday, August 9, 2011

Second Quarter 2011 Highlights

Second quarter net revenue reached $57.7 million, up 17.1% from $49.3 million for the same period last year
Organic growth accounted for the majority, or approximately 99.9% of total sales growth
Gross profit increased to $23.7 million, up 3.2% from $23.0 million from the same period last year
Net income was $10.8 million, or $0.30 per fully diluted share, compared with $14.3 million, or $0.41 per fully diluted share, for the second quarter of 2010
Adjusting for non-cash items related to the change in fair value of warrant liabilities and non-cash compensation expense, adjusted net income was $12.0 million, or $0.33 per diluted share, compared with adjusted net income of $13.5 million, or $0.39 per diluted share, for the second quarter of 2010
In June 2011, Henan Kaifeng High Pressure Valve Co., Ltd. received two purchase orders from China Guangdong Nuclear Power Group for gate valves, check valves and globe valves worth $2.0 million in total.
In June 2011, the Company signed a strategic cooperation agreement with Sinopec International Petroleum Service Corporation. Under the agreement, the Company would supply various valve products for Sinopec Petroleum Service's international projects.
In June 2011, China Valve Technology (Changsha) Valve Co., Ltd. received purchase orders for the Tibet Pangduo Hydro Project and South-to-North Water Diversion Project worth several million USD in total. The Company expects to deliver these orders in July 2012 and October 2011, respectively.
In June 2011, the Company announced that with guidance and coordination from the Bureau of National Energy of China, Henan Kaifeng High Pressure Valve Co., Ltd. has signed research and development agreements with another four demonstration projects, Jiangshu Jurong Power Plant, Chongqing Shuanghuai Power Plant, Henan Sanmenxia Power Plant and Jiaozhou Longyuan Power Plants, to supply main stream valves, hydraulic inlet/outlet three-way valves, extraction check valves, and turbine vacuum butterfly valves for use in 1,000 MW ultra-supercritical power plants.

"Our performance for the second quarter 2011 was mixed. We managed to maintain robust organic growth on the back of continued demand for valve products particularly in the power generation industry and the successful expansion of our international presence through the delivery of large orders to overseas customers. While our operating cash flow turned positive due to productive collection of current accounts receivable, we experienced a decline in profitability as increased raw material and labor costs and higher operating expenses strained our operating performance. Rising raw material costs have been a particular concern, since raw material prices account for approximately 80% of our production costs," said Mr. Jianbao Wang, Chief Executive Officer of China Valves. "Although we have successfully attracted larger orders and thereby gained more visibility in terms of our backlog, our involvement in more complex projects has resulted in more quality conscious customers demanding longer warranties, thereby increasing retainage. In light of China's tighter credit environment, we continue to monitor our bidding and collection practices in order to maintain a healthy operating cash flow."

Business Outlook

The Company focuses on growing its sales organically by further streamlining its operations through the consolidation of sales and raw material procurement functions between its different subsidiaries and strengthening product quality in order to attract more high profile projects. While the Company expects the power generation, water supply and petrochemical and oil sectors to drive demand for valves, the higher inflation in combination with larger orders may lengthen the sales cycle.

The Company maintains its focus on selective bidding for profitable projects. As of June 30, 2011, backlog of firm orders was $125 million of which it expects to deliver 70% by the end of the year.

"For the remainder of this year, we expect to focus on the following key areas: First, we aim to strengthen the cooperation between our operating subsidiaries to improve sales procedures and realize production efficiency. Second, we continue to emphasize our research and development capabilities in order to improve our product offerings, expand our project scopes and strengthen our competitive advantages against both domestic and international valve players in niche markets. Third, we are committed to reducing accounts receivable balance through the implementation of centralized payment terms, increased training of sales staff and linking sales commissions to successful collection," said Mr. Wang. "We maintain our outlook for 25-28% revenue growth for fiscal year 2011. Given the implementation of production efficiencies offset by ongoing raw material and labor cost pressures, we expect our gross profit margin to remain around 41-42% for the remainder of the year."

Tuesday, May 10, 2011

First Quarter 2011 Highlights

First quarter net revenue reached $42.0 million, up 56.6% from $26.8 million for the same period last year
Sales from organic growth was 42.1% of total sales growth
Gross profit increased to $17.5 million, up 26.3% from $13.9 million from the same period last year
Net income reached $7.6 million, or $0.21 per fully diluted share, compared with $6.6 million, or $0.19 per fully diluted share, for the first quarter of 2010
Adjusting for non-cash items related to the change in fair value of warrant liabilities, non-cash compensation expense and gain from acquisitions, adjusted net income was $6.7 million, or $0.19 per diluted share, compared with adjusted net income of $7.0 million, or $0.20 per diluted share, for the first quarter of 2010

"Although seasonally slow, the first quarter of 2011 demonstrated robust revenues growth reflecting strong market demand and the contribution of our subsidiary Hanwei Valve, which we acquired in April of last year. Leveraging Hanwei Valve we were able to expand sales to the petrochemical and oil sectors, further shifting our sales mix to ball valves and gate valves particularly for oil and gas pipelines and petrochemical plants. Organic growth was a solid 23.8% as we continued to expand sales to the power generation market through sales of large diameter high pressure valves and other valves," said Mr. Jianbao Wang, CEO of China Valves. "Our gross margins, while at level with last quarter after excluding any non-cash charges, remained lower than the year ago period mainly due to the changes in our sales mix for the quarter. Our main priority for 2011 is to increase integration of procurement and sales across our different subsidiaries. As we proceed with the restructuring of our production processes, we expect some improvement in our margin profile over time."

Business Outlook

The Company's current priority is improving the efficiency of internal operations through streamlining of manufacturing practices and consolidating sales and procurement efforts of its different subsidiaries. The Company expects the petrochemical, oil and gas industry to drive sales in 2011, in addition to demand from domestic thermal power and water supply markets. While China's nuclear valve market faces heightened safety standards following the nuclear disaster in Japan in March, the Company expects nuclear power to remain a long-term growth driver.

The Company is currently focused on bidding for larger projects, which it expects will improve profitability going forward. As of March 31, 2011, backlog of firm orders was $100 million.

"We are pleased with a strong start to the year and remain comfortable with our target revenue growth rate of 25%-28% for 2011. We expect to maintain our position as an industry leader in a number of our end-user markets through our focus on innovation, new product introductions and technical excellence. We maintain our target revenue growth rate of 25%-28% for 2011. Due to inflationary pressures, we maintain our gross margin expectation of around 41%-42% for the next few quarters. As we complete the integration efforts of our subsidiaries and recognize manufacturing and sourcing efficiencies, we would expect to see this result in improved margin performance," said Mr. Wang. "Account receivables remain a challenge, as we are adjusting to the customer bases of our newest subsidiaries. In order to improve cash flow, we are gradually introducing more centralized payment terms and collection procedures and expect to update our investors as we make progress on this important issue. We believe that our cash position and available debt facilities provide us with sufficient resources to execute our growth strategy."

Thursday, March 17, 2011

Fourth Quarter Highlights:

Fourth quarter net revenue reached $52.3 million, up 106.3% from $25.4 million for the same period last year
Organic growth was 31.6% of total sales growth
Gross profit increased to $18.4 million, up 48.8% from $12.4 million from the same period last year
Net income reached $6.4 million, or $0.18 per fully diluted share, compared with $16.4 million, or $0.52 per fully diluted share, for the fourth quarter of 2009
Adjusting for non-cash items related to the change in fair value of warrant liabilities and non-cash compensation expense, adjusted net income was $4.3 million, or $0.12 per diluted share, compared with adjusted net income of $6.4 million, or $0.20 per diluted share, for the fourth quarter of 2009

Full Year 2010 Highlights

Net revenue reached $183.7 million, up 92.6% from $95.4 million last year
Organic growth was 22.6% of total sales growth
Gross profit increased to $80.4 million, up 71.7% from $46.8 million from last year
Net income reached $43.2 million, or $1.25 per fully diluted share, compared with $23.4 million, or $0.75 per fully diluted share, for 2009
Adjusting for non-cash items related to the change in fair value of warrant liabilities, gain from acquisition and non-cash compensation expense, adjusted net income was $40.3 million, or $1.16 per diluted share, compared with adjusted net income of $24.9 million, or $0.80 per diluted share, for 2009

"We continued our solid sales growth in the fourth quarter of 2010 supported by our acquisitions earlier in the year. Ball valves contributed by our subsidiary Hanwei Valve boosted sales to the petrochemical, oil and gas industry, to which sales increased more than 300% year over year in the quarter. This represents an ongoing shift in our product portfolio and increased diversification of revenue among several significant growth industries in China. During the quarter, we also maintained our strongholds in the thermal power generation and water supply sectors while expanding sales to the nuclear power industry through the contribution of new products, such as large diameter high pressure valves used in power stations, large diameter valves for water-pipe projects and gate valves for nuclear power plants," said Mr. Jianbao Wang, CEO of China Valves.

"Looking forward, we remain confident in the growth opportunities with our end-user markets and in our position as an industry leader. The localization trend in the thermal power industry is an encouraging sign of a shift towards domestic valves in increasingly demanding applications and one we hope will transfer to other key applications as well. Consequently, we target 25%-28% revenue growth for 2011 excluding any additional acquisitions," said Mr. Wang

Wednesday, February 23, 2011

ZHENGZHOU, China, Feb. 23, 2011 /PRNewswire-Asia/ -- China Valves Technology, Inc. today announced that with guidance and coordination from The Bureau of National Energy of China, the Company's subsidiary Henan Kaifeng High Pressure Valve Co., Ltd. ("Kaifeng Valve") has signed a research and development agreement with Nantong Power Plant to supply DN250main stream valves, DN350 hydraulic inlet / outlet three-way valves, DN800 extraction of high discharge check valves, and DN2800 turbine vacuum Butterfly valves, all which are newly designed for 1,000 MW ultra-supercritical power plants.

In March, the Company plans to sign supply contracts for ultra-supercritical 1,000MW specifications with an additional four power plants.

Kaifeng Valve has been approved by the State Council as a key provider for the localization of high-performance valves for thermal power plants. Currently, there are 11 research projects for ultra-supercritical valves to be localized or manufactured by local companies for thermal power plants, of which Kaifeng Valve undertakes seven. This level of involvement reflects the subsidiary's key position in the domestic thermal power valve industry, together with its technological innovation advantage.

Wednesday, November 10, 2010

Third Quarter 2010 Highlights

Third quarter net revenue reached $55.3 million, up 97.8% year-over-year.

Gross profit increased to$25.1 million, up 82.4% year-over-year.

Net income reached $15.9 million, or $0.45 per fully diluted share, up from $3.8 million, or $0.12 per fully diluted share, for the third quarter of 2009.

Adjusting for non-cash items related to the change in fair value of warrant liabilities and non-cash compensation expense related to the release of make good shares from escrow, adjusted net income was$15.6 million, or $0.44 per diluted share, compared with adjusted net income of $7.4 million, or $0.21 per diluted share, for the third quarter of 2009.

"The third quarter was another record breaking quarter for China Valves as we nearly doubled our sales year-over-year due to the contribution of our acquired subsidiaries and strong demand from our end-user customers in the thermal power generation, water supply and petrochemical, oil and gas sectors. With support from our Shanghai Pudong Hanwei Valve Co., Ltd. (“Hanwei Valve”), we have continued to gain ground in the petrochemical, oil and gas sectors,” said Mr. Jianbao Wang, CEO of China Valves. "During the quarter, we restructured our production to optimize the utilization of our various factories by shifting sales from Henan Kaifeng High Pressure Valve Co., Ltd. (“Kaifeng Valve”) and Zhengzhou City Zhengdie Valve Co., Ltd. (“Zhengdie Valve”) to the newly acquired Able Delight (Changsha) Valve Co., Ltd. (“Changsha Valve”) and Hanwei Valve. Integrating the sales of our different subsidiaries further is our current priority. "

Business Outlook

The Company expects to improve sales efficiency through consolidation of sales of its subsidiaries, cross-regional promotion, and further diversification of end-user industries. In the upcoming months, the Company expects to see a growing contribution from Hanwei Valve in sales in the petrochemical, oil and gas sectors. As of September 30, 2010, the Company’s backlog was around RMB 500 million (approximately $73 million), of which it expects to realize RMB 300 million (approximately $44 million) in the fourth quarter of 2010. As such, the Company expects to generate approximately $11 million in net income for the fourth quarter of 2010.

“Given the strong performance of our new subsidiaries, we expect to outperform our previous guidance of $40 million in net income for 2010 by approximately $7 million. Looking forward towards 2011, we remain confident in the growth opportunities with our end-user markets and in our position as an industry leader. We expect to further strengthen the performance of our new subsidiaries as we continue to integrate sales practices and improve manufacturing efficiency of our companies. As a result, we target around 30% revenue growth for 2011 excluding any additional acquisitions.”

Tuesday, August 10, 2010

Second Quarter 2010 Highlights:

Second quarter net revenue reached $49.3 million, up 97.5% year-over-year.
Gross profit increased to $23.0 million, up 84.0% year-over-year.
Net income reached $14.3 million, or $0.41 per fully diluted share, up from $0.2 million, or $0.01 per fully diluted share, for the second quarter of 2009.
Adjusting for non-cash items related to the change in fair value of warrant liabilities, adjusted net income was $13.5 million, or $0.39 per diluted share, compared with adjusted net income of $7.7 million, or $0.25 per diluted share, for the second quarter of 2009

"China Valves achieved record financial results this quarter, reflecting the strong demand for the products of our original subsidiaries and our recent acquisitions. In addition to enriching our product portfolio, our acquisitions have brought us a larger and more diverse customer base," said Mr. Siping Fang, Chairman and CEO of China Valves. "This quarter we focused primarily on our core markets in the thermal power generation and water supply sectors, while also developing our presence in the petrochemical, oil and gas, and nuclear sectors. Given our financial performance thus far and the current market environment, we are confident of our strong performance in 2010."

So far, the Company has been successful in executing its growth plan, which includes improving sales efficiency through increased consolidation of sales of its different subsidiaries, geographic diversification for product promotion, and diversification of end-user industries. The Company's backlog at the end of July 2010 is around RMB 600 million (approximately $87.9 million), which it expects to realize by the end of this year.

Given the variations in gross margin for the Company's different products and operating subsidiaries, the Company experiences fluctuations in gross margin from quarter to quarter.

"Integrating our newly acquired subsidiaries and consolidating their sales is our key focus for the remainder of 2010. We expect to see increased contribution from our newest subsidiary Shanghai Hanwei in the second half of 2010, which will also substantially increase our exposure to the fast-growing petrochemical industry. While we enhance the operations of our existing operating subsidiaries, we will also continuously assess potential acquisitions that will improve our competitive strengths," said Mr. Fang.

The Company reiterates its net income guidance of $40 million for fiscal year 2010. (This implies aboout $20.0 million in adjusted net income. The company reported adjusted net income of $13.7 million and EPS of $0.44 in the second half of 2009).

"Although we passed the midpoint of our guidance six months into the year and have a solid backlog, we choose to remain conservative at this time and will continue to provide regular updates to investors on our business," concluded Mr. Fang.

Thursday, May 13, 2010

The Company's main growth initiatives for 2010 involve consolidating sales of different subsidiaries through sales headquarters in Shanghai to improve sales efficiency, promote products across different regions, increase synergies between operating subsidiaries, increase sales to the petrochemical industry, and optimize valve designs to reduce waste from the casting process. The Company also continues to seek and evaluate potential acquisitions.

"So far in 2010, we have a number of milestones to celebrate as we continue executing our growth strategy. The acquisition of Hanwei Valve is an important step towards diversifying our product portfolio by adding sophisticated products and patented applications. It will improve our position in key end-user markets such as the petrochemical industry, help us enter new end-user markets such as bioengineering, and strengthen our distribution network in our core end-user markets in water supply and power generation sectors. Moreover, we believe that increased collaboration between our different subsidiaries in combination with our trailblazing products will make 2010 a highly successful year for China Valves," concluded Mr. Fang.

The Company reiterates its net income guidance of $40 million.

Thursday, April 1, 2010

"China Valves had a very successful year in 2009. We achieved strong financial performance, closed a successful acquisition, raised $24.7 million in capital and listed our stock on the NASDAQ Global Market. Our robust sales in the fourth quarter, especially to the power supply and water supply industries, allowed us to exceed our net income guidance for the year," said Mr. Siping Fang, the Chairman and CEO of China Valves. "Moreover, we made significant strides towards the end of the year in executing on our growth strategy through identifying and negotiating with new acquisition targets to drive our future growth."

The Company reaffirms its previously issued guidance of $40 million in net income for 2010. The guidance includes the impact of the acquisition of Hanwei Valve, which the Company expects to close shortly, but does not include the impact of any additional potential acquisitions. This guidance excludes the impact of non-cash compensation expenses, if any, related to the release of make good shares and changes in fair value of derivative instruments.

Source: PR Newswire (March 29, 2010)

Thursday, December 10, 2009

Supported by governmental infrastructure spending especially on municipal water supply and drainage projects and a replacement cycle within power plants, China Valves expects to see continued demand for high-end valve products in 2009 and 2010. Moreover, the Company expects to see accelerated growth from the nuclear power industry in the future.

"Given our adjusted year-to-date net income of $18.5 million, we are very well positioned to meet our guidance for 2009. Because of many of our customers slowing orders in the last months of the year in anticipation of reduced capacity utilization in the first quarter for the Chinese New Year holiday, we expect our fourth quarter to be slightly slower than our third quarter," said Mr. Fang, "In 2010, we expect growth to come from our expansion in manufacturing capacity throughout 2009, which includes the construction of a new facility, upgrades to existing production capacity, and two completed acquisitions. Moreover, we are constantly evaluating new acquisition targets that complement our existing business and that expand our product offerings and exposure to growing end-user markets."

Source: PR Newswire (November 13, 2009)

Friday, September 18, 2009

'For the second quarter we achieved exceptional year-over-year top and bottom line growth driven by strong demand for our higher end products and a streamlined selling process and expense controls put in place earlier this year. While the favorable comparisons are partially due to delayed shipments and lower sales in the second quarter of 2008 because of the earthquake in Sichuan province, these results provide us with confidence that we are on track to achieve our financial goals for 2009 as we head into what are normally the seasonally strongest quarters for our industry,' said Mr. Siping Fang, Chairman and CEO of China Valves.

Due to increased governmental spending, China Valves expects to see continued demand for high-end valve products from domestic infrastructure and power generation projects. The water supply and drainage and nuclear power sectors should increase demand for the Company's high-end, high-margin products, such as forged steel valves for nuclear power stations and two-way metal sealing butterfly valves for water supply systems. The Company has applied for the license required to produce valves used in the core island of nuclear power stations, and expects to obtain the approval from the government by the end of 2009. Consequently, the Company expects gross margin for second half of 2009 will remain at the same level of second quarter of 2009.

As of June 30, 2009, the Company's backlog was RMB 280 million, or approximately $41 million. For the full year 2009, the Company remains confident in meeting the target of annual net income of $23 million and fully diluted earnings per share of $0.738 on a post-split basis.

Full Year Fiscal 2008 Guidance Ending December ^a

	2009 Guidance	2008 Reported	Period Change
*Non-GAAP Net Income	$23 million	$10.8 million	112.97%
*Non-GAAP EPS	$0.738	$0.46	60.43%

Source: PR Newswire (August 14, 2009)

^aThe above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement. EPS numbers have been adjusted for a 1 for 2 reverse split.

^b Non-GAAP EPS figures generally 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.

Sunday, May 24, 2009

'We had solid operational performance and financial results in the first quarter of 2009. Most of the orders which we filled in the first quarter of 2009 were placed in the fourth quarter of 2008, when there already were clear signs of a domestic economic slowdown. In the first quarter of 2009, demand remained strong for our metal valve products used in civil infrastructure projects. We continued throughout the quarter to position ourselves for further growth by manufacturing new and increasing amounts of high quality, high technology valves. We expect demand for our products to grow as China's announced economic stimulus programs begin to take effect and the domestic economy recovers,' said Mr. Siping Fang, Chairman and CEO of China Valves.

Full Year Fiscal 2008 Guidance Ending December

	2009 Guidance	2008 Reported	Period Change
*Non-GAAP Net Income	$23 million	$10.8 million	112.97%
*Non-GAAP EPS	$0.369	$0.23	60.43%

* EPS Figures exclude non-operating gains and losses. 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 their first quarter financial press release.

Source: PR Newswire (May 15, 2009)

Friday, April 10, 2009

Guidance Report:

'While our fourth quarter results came in below our expectations, we achieved record financial results in 2008 and exceeded our make good target of $10.5 million in net income, excluding non-cash charges. We believe China's valve market will fare better than other industries in the wake of the weakening global economic environment due to government support of large infrastructure construction projects and demand related to rebuilding the earthquake-affected areas in Sichuan province,' commented Mr. Siping Fang, Chairman and CEO of China Valves.

The Company expects gross margin to improve in first half of 2009, as selling prices have remained stable, while raw materials prices declined significantly in the fourth quarter of 2008. The company remains focused on meeting the targeted net income established in the make good escrow agreement related to the August 2008 private placement.

Full Year Fiscal 2008 Guidance Ending December

	2009 Guidance	2008 Reported	Period Change
*Non-GAAP Net Income	$23 million	$10.8 million	112.97%
*Non-GAAP EPS	$0.369	$0.23	60.43%

* EPS Figures exclude non-operating gains and losses. 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 their fourth quarter financial press release.

Source: PR Newswire (March 17, 2009)

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