China Leon Announced its 2018 Interim Results; Focused on Overseas Business Expansion


HONG KONG – (ACN Newswire) – China Leon Inspection Holding Limited (the “China Leon” or the “Company”, Stock Code: 1586.HK) is pleased to announce its interim results for the 6 months ended 30, June 2018 (the “Review Period”).

Given coal’s long-term dominant position in China’s energy structure, only a moderate portion of coal is currently subject to independent testing and inspection, so the coal testing and inspection industry still has steady growth potentials. China Leon fully seized the favourable opportunities in the industry and market environment, increased its input of resources and actively planned the strategy layout, which helped to cope with challenges domestically and abroad, and reinforced the market leading position and. During the Review Period, the Company recorded a revenue about RMB101.9 million, and a gross profit about RMB54.2 million.

Largely Focused on Overseas Business Expansion and Completed the Service Center Network
The Company stepped up efforts in market development as per the established corporate strategy, upgrading the 13 service centers in Mainland China on an ongoing basis. Deeply understanding the importance of overseas business expansion to the internationalization of the Company, the Company was selectively opening service facilities to provide coal testing services in countries with abundant coal export and import volume which represent large potential markets. The Company increased the considerable input and has established overseas service centres in Singapore, Indonesia, Malaysia, India and Australia (all five overseas service centres are under construction) through new construction as well as acquisition. Thereby further completing the service network. The establishment of overseas service centres will not only enhance the Company’s brand recognition internationally, setting off on the Company’s march to the international market, but also will increase overseas revenue, creating new profit growth points and bringing greater returns to the shareholders of the Company.

Successfully Won the Bid for Qualified Project with the Promissing Revenue Growth
The Company never stops looking for the projects that cater to development needs and new development direction. During the Review Period, Beijing Huaxia Lihong Commodity Inspection Co., Ltd., an indirect wholly-owned subsidiary of China Leon, successfully won the bid for the commercial coal third-party coal inspection services project in Northern Shannxi Mining Area for Shaanxi Coal Selling and Transportation (Group) Corporation*) (“Shaan Coal”). This project generates an income of approximately RMB30,000,000 per year with a contractual term of five years and is expected to contribute over RMB140,000,000 to the Company’s revenue. Besides, Shaan Coal agreed to engage Beijing Huaxia Lihong to provide Shaan Coal with commercial coal third-party coal inspection services in Northern Shannxi Mining Area. The Project not only further consolidated the Company’s leading position in the coal inspection industry but also represented a milestone for the Company, which would be important to drive the Company’s business promotion and pursue similar projects in the subsequent period.

Fully Graspping the Favorable Policies, Established Xinjiang Subsidiary and Set up a Mobile Laboratory
The “Outline of the Thirteenth Five-Year Plan for the National Economic and Social Development of the Xinjiang Uyghur Autonomous Region” issued in 2017 mentions “promoting clean and efficient use of coals as its main direction, focusing on industrial restructuring and development transformation and establishing the 14th major coal base in China based on four major coal fields in Dzungar, Tuha, Ili and Kubai, respectively”. Also, “Coal transfer from Xinjiang to other areas” and “Electricity Transmission from Xinjiang to other areas” will become key projects. China Leon seized the development opportunities brought by favorable policies, in the first half of 2018, the Company established a subsidiary in Xinjiang and set up a mobile laboratory, with remarkable scientific research results as well as further expansion of coal testing and inspection business.

Mr. LI Xiangli, Chairman, Executive Director and Chief Executive Officer stated: “We believe that coal testing and inspection are our core competency. In future, we will upgrade and expand our network of service centres, strengthen our research and development capabilities to improve our testing procedures and laboratorial capabilities, as well asconsolidate China’s coal testing and inspection market through selected acquisitions, thereby further consolidating the Company’s leading position in the coal inspection industry and striving to develop into an international, diversified and intelligentized advanced third party quality assurance service provider.”

About China Leon Inspection Holding Limited
China Leon is the largest coal testing and inspection services provider in China. Through an extensive network of service centers strategically positioned primarily at major coal-trade ports in China together with new overseas service centers, the Company offers a comprehensive suite of testing and inspection services to customers in the coal industry as well as other various domestic and foreign industrial sectors, which includes (1) testing services, (2) surveying services and (3) witnessing and ancillary services. The Company is committed to developing itself into the most credible independent quality assurance service provider in the world.