China Leon Announced its 2017 Annual Results

Achieved Remarkable Results from Strategy of International Diversification and Intelligentization

HONG KONG — China Leon Inspection Holding Limited (the “China Leon” or the “Company”, Stock Code: 1586.HK) is pleased to announce its annual results for the 12 months ended 31, December 2017 (the “Review Period”), and has passed the resolution for the proposed payment of the final dividend of RMB0.025 per share for this year.

In 2017, the economy of the PRC grew steadily, the demand for energy increased slightly, coal price fluctuated at high level, while power generation and coal production volume both recovered and increased. China Leon fully seized the favourable opportunities in the industry and market environment, increased its input of resources and actively planed the strategy layout based on the established international, diversified, intelligentization and information strategies, thereby operating well during the Review Period and recording a stable and sound growth in its performance, which created good returns for its shareholders. During the Review Period, The Company recorded a revenue about RMB200.9 million, a gross profit about RMB110.7 million and a net profit about RMB34.7 million, representing an increase of 7.8%, 14.9% and 3.2% respectively, as compared to the same period in 2016.

Expanded Service Center Network and Realized Overseas Layout Successfully
In 2016 and before, the service centers covered primarily major seaports for coal trade in China, providing testing services for seaborne coal trade. In 2017, the Company successfully achieved the cover and expansion of t service center network in domestic and foreign areas: the Company constantly improved the domestic service network, established three new domestic service centers in Jiangyin, Shaanxi and Hubei with its scope of inspection services extending to inland coal trade via rail or truck and the number of domestic service centers reaching 11; the Company established four new overseas service centers in Singapore, India, Malaysia and Indonesia; the overseas service network has covered Southeast Asia and businesses have achieved breakthroughs in terms of diversity; business regarding the inspection of other minerals other than coal as well as oil in overseas service centers was developed.

Deployed Adequate Resources and Obtained Fruitful Achievements in Scientific Research and Development
The Company regards the technical improvements as the critical key to its level of service and its ability to achieve competitive advantages in the market, as such, the company deploys adequate resources to advance research and development efforts. In 2017, the Company increased input in research and development, the R&D project “Robot Intelligent Coal Preparation System” obtained the technological accreditation by an industry association and has commenced operation. After appraisal, experts confirmed that such system is efficient and environmental friendly, which filled the gap in coal robotic automation in the PRC and reached international advanced level. Another R&D project “Robotic Automatic Testing System” is being developed, which has attracted much attention from the market. Besides, a new generation of information system “LEON LIMS 1.0” self-developed by the Company officially commenced operation in August 2017, under which information management and control over coal inspection is achieved throughout the entire business process from acceptance of appointment to issuance of certificates.

Fully Grasped Investment Opportunities and Accelerated the Development of New Regional Market
In 2016 and before, the Company expanded the business primarily through organic growth. In view of abundant acquisition ancooperation opportunities in the testing and inspection industry and the Company focus on opportunities that can enhance its service capabilities or coverage of services. From 2017, the Company rapidly entered into new regional markets, established overseas service network and entered into inspection service areas of other commodities by introducing outstanding personnel and teams or partners by way of investment holding, thereby further expanding the service capabilities and coverage and laying a solid foundation for the continued growth of the business in the future.

Mr. LI Xiangli, Chairman, Executive Director and Chief Executive Officer stated: “The Company continueously takes the coal testing and inspection as the core business at this stage, while scientific research innovation, international expansion and diversified development as the direction in the future. Looking forward to the future, the Company intends to further strengthen the leading position in the coal testing and inspection industry through upgrading and expanding the network of service centers, strengthening capabilities in scientific research and innovation, and pursuing strategic acquisition or joint venture cooperation to enhance service capabilities as well as expand service coverage, thereby further develop into an international, diversified and intelligentized advanced third party quality assurance service provider, bringing greater returns to the shareholders of the Company .”

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