Revenue Increased By 93.5% to USD 9.4 Million
Net Profits Increased By 86.1% to USD 4.3 Million
HARBIN, China, Aug. 26 /Xinhua-PRNewswire-FirstCall/ -- Harbin Electric, Inc. (OTC Bulletin Board: HRBN) ( http://www.harbinelectric.com ) is an American company, targeting the fast-growing Chinese linear motor and special electric motor markets, with its operation based in Harbin, China. HRBN announced on August 15, 2005 its mid-year financial report covering the six months ending June 30, 2005.
The half-year's revenue was USD 9.4 million, and net profit reached USD 4.3 million, with earnings per share (EPS) of USD 0.28.
Financial Results Summary
For the six months ended June 30, 2005, HRBN achieved record-high sales -- USD 9.4 million, an increase of 93.5% compared with the second half of 2004. This increase is the result of the fact that the company began operations in its current facility in June 2004 and has continually expanded production since then. The first six months also saw a continuing increase in customer demands. The company also benefited from the increased market acceptance of linear electric motors.
The consolidated half year net profits amount to USD 4.3 million, an increase of 86.1% compared with the second half-year profits of 2004. This income growth in the first half year has confirmed the company's strategy of targeting linear induction motors, integration products and special motors markets.
Chairman's Comments on the Operating Results and Prospects
Chairman and CEO Tianfu Yang, commenting on the six-month results, said as follows: ''The first half of the year saw rapid growth. And during that period, we were able to maintain a gross profit margin of 51%. These results are attributable to the following:
-- from a macro perspective, the blooming macro economy of China produced
a huge demand for electric motors in the Chinese market which was shown
by the market recognition of linear induction motors;
-- from a micro perspective, HRBN selected the subdivided electric motors
market at the right time, in that, it is full of potential and has a
wide-range of applications.
Moreover, HRBN found a good access point to our target markets. The 51% gross profit margin is a result of good positioning in the engineered integration system products market, with high value added-ness, as well as the cost advantage that is lacked by our foreign competitors.''
Regarding the company's prospects, Mr Yang said, ''Harbin is well positioned in relation to its target markets. We are aggressively pursuing those markets. Further, we intend to proactively explore the international market as we continue to grow in our domestic market.''
Yang summarized in the end, ''With the concerted efforts of all our employees, we expect that our operating income will continue to grow this year.''
About Harbin Electric, Inc.
Harbin Electric, Inc. is an American company, targeting the fast-growing Chinese linear motor and special electric motor markets, with its operation based in Harbin, China. The linear motors use the principles of magnetic properties to induce linear forces and represent a significant improvement over traditional electric motors based on design, energy efficiency and precision movement. HRBN grasps the core technologies for electric motors manufacturing, who can research and manufacture special electric motors on clients' demand.
Safe Harbor Statement
This press release may contain statements which address such key issues as the company's growth strategy, future financial results, market positions, and product development. Such statements should be carefully considered, and it should be understood that many factors could cause forecasted and actual results to differ from these statements. These factors include, but are not limited to, price fluctuations, currency fluctuations, research and development and personnel costs, pensions, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures. This document is not intended to be and is not an advertisement for any securities of the company. For a more complete discussion of the risk factors affecting our business please refer to our Quarterly Report on Form 10-QSB filed with the United States Securities and Exchange Commission.
HARBIN ELECTRIC, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTH PERIOD ENDED
June 30, 2005
Net revenue $9,402,739
Cost of revenue $4,598,080
Gross profit $4,804,659
Operating expenses
Selling expenses $124,333
General and administrative expenses $394,001
Total operating expenses $518,334
Income (loss) from operations $4,286,325
Non-operating Income
Interest income $14,118
Net income (loss) $4,300,443
Other comprehensive loss -
unrealized loss on marketable
securities $(145,645)
Comprehensive Income (loss) $4,154,798
Basic weighted average shares
Outstanding 15,000,450
Basic net earnings per share $0.29
Diluted weighted average shares
Outstanding 15,125,588
Diluted net earnings per share $0.28
