Northern New Energy Announces 2017 Third Quarter Results

northern new energy

Revenue Contribution of New Energy Business Climbs to over 70% of Total; Pushes Group Revenue Up by 53.1%

HONG KONG — Northern New Energy Holdings Limited (“Northern New Energy” / the “Group”, stock code: 8246) today announced its unaudited third quarter results for the nine months ended 30 September 2017. During the period, with developing into a dynamic integrated new energy enterprise as its primary objective, the Group continued to drive the development of New energy business.

During the period, revenue of the Group amounted to RMB112.9 million (corresponding period in 2016: RMB73.8 million), representing a leap of 53.1%, mainly attributable to the increase in revenue of RMB47.8 million from New energy business. Net profit and total comprehensive income attributable to owners of the Company amounted to RMB2.4 million (corresponding period in 2016: RMB13.7 million). The decrease was mainly caused by an increase in administrative expenses as a result of amortising the RMB6.9 million share-based payment related expense during the Current Period, as well as the absence of the one-off gain of RMB 5.1 million from disposal of subsidiary in the Corresponding Period. The basic and diluted earnings per share were both RMB0.07 cents (corresponding period in 2016: RMB0.40 cents and RMB0.39 cents respectively).

In the past two years, the Group was able to cement its foundation in the industry and expand the scope of its business. As a result, both the revenue and net profit of New energy business for the period recorded satisfactory year-on-year growth. Revenue from the business accounted for over 70% of the Group total, up notably from about 40% in the same period last year. At the same time, the Group continued to hire more talent and enhance technologies to pave way for it to capture more opportunities. Capitalising on its profound expertise and excellent services, the Group provided sales and installation of de-nitrification equipment for coal-fired boilers in Tianjin in the third quarter, and also completed condensate gas premixed boiler room equipment installation and debugging contracts, which together constituted a major source of revenue of the Group in the period. Sales and purchase contracts of industrial products also brought in part of the Group’s revenue.

Looking ahead, in the work report of the 19th National Congress of the Communist Party of China, the PRC Government has proposed to strengthen the energy conservation and environmental protection industry, clean production industry and clean energy industry. The Group believes related policies will help release more of the development potentials of the new energy industry and also present it with more opportunities.

The Group will continue to base in Tianjin going forward. By bringing in liquefied natural gas (“LNG”) conversion systems such as gasification stations, the Group intends to quickly expand its service scope to cover also production, which will allow it to offer more comprehensive services and develop into a dynamic integrated new energy enterprise. The Group will continue to actively explore opportunities for cooperation with the aim of introducing LNG gasification stations in prime geographical locations while complying with increasingly strict environmental requirements, thus grasping opportunities arising from strong local demand for new energy.

In addition, the Group will actively enlarge its customer base and market share in Tianjin, thereby enrich its income sources. In the long term, Northern New Energy looks forward to expanding the footprint of its New energy business to cover surrounding regions in the north. To broaden its income streams and improve profitability, the Group will continue to enhance the strengths of its team and look for potential acquisition opportunities, cooperate with capable partners and allocate more resources to New energy business as planned. The management hopes all these strategic moves will see the Group open a new chapter of development and deliver maximum returns to shareholders.