TAIYUAN CITY, China, Oct. 29, 2012
/PRNewswire-FirstCall/ -- Longwei Petroleum Investment Holding Ltd.
(NYSE MKT: LPH) ("Longwei" or the "Company"), an energy company
engaged in the storage and distribution of finished petroleum
products in the People's Republic of
China ("PRC"), today announced it has signed purchase
agreements with nine major customers for its Huajie facility and
received the endorsement of local government and business leaders
based on a site visit to its new facility on October 23, 2012.
The Huajie facility site visit by local government leaders
included Mr. Zhong, the General Director of the Fanshi County
Commerce Bureau; Mr. An, the General Director of the Xinzhou
Commerce Bureau; and Mr. Wang, the Vice Director of the Yuanping
Railway Operations Bureau; in addition to other local business
leaders. These leaders had high praise for Longwei's purchase of
the Huajie facility. They pledged their support to ensure its
success by assisting Longwei to expand its customer base quickly by
encouraging local enterprises in Fanshi County to utilize the new
facility and increase their petroleum consumption. The local
leaders view the new facility as a stimulant for regional growth
and as a key piece of infrastructure to support local employment
and economic development.
"We are pleased to receive the full support of the local
government and business leaders, and their endorsement to help us
build our customer base," said Cai Yongjun, Chairman and Chief
Executive Officer of Longwei. "Since opening the facility, we
have signed contracts with at least nine major regional industrial
companies in mining, steel and logistics. We are looking
forward to adding more customers and extending our reach into this
fast-growing industrial area of northern Shanxi Province."
The officials toured the facility and new operations with the
Company's management team. Longwei demonstrated the
facility's working processes, including storage and pumping
operations, fire control, and other safety and environmental
measures. The group expressed a high degree of satisfaction
with the facility's workflow, safety and quality control.
Longwei expects year-over-year revenue growth of approximately
26.6% to $646.3 million, and net
income growth of approximately 24.2% to $77.6 million, adjusted for the warrant
derivative liability, for the fiscal year ending June 30, 2013. The growth is driven
primarily by the ramp-up of the Huajie facility and organic growth
at the Company's two existing facilities.
Recent economic indicators show that the PRC economy has
stabilized and expects higher growth in the fourth quarter of
2012. "Now is a critical point for the country's industrial
economy. Positive factors are accumulating," said Zhu
Hongren, Chief Engineer of the Ministry of Industry and Information
Technology. The PRC also surpassed the United States as the world's largest
recipient of global foreign direct investment in the first half of
2012, showing that global investors have confidence in the world's
second-largest economy. China Daily
(October 26, 2012).
"We expect meaningful revenue contribution from our Huajie
facility beginning in the second half of fiscal 2013 as we ramp up
our operations and sales efforts," said Michael Toups, Chief
Financial Officer of Longwei. "Based on our experience during
the Gujiao ramp-up phase in 2010, we are confident we can develop
this new market quickly."
The GDP growth rate for Shanxi
during 2011 was 13%, according to China
Daily (March 13, 2012),
and it is expected to be approximately 10% for 2012, which outpaces
the general economic growth estimates of 7.5% in the PRC. The
provincial government has estimated the fixed-asset investment in
Shanxi to be RMB 5 trillion (approximately $790 billion) over the next five years, according
to China Daily (September 13, 2011). The provincial
government also recently announced an additional RMB 1 trillion (approximately $158 billion) in local development projects as
part of the region's industrial stimulus plan, according to
China Securities News (August 23,
2012). The Company believes its locations within
Shanxi Province are advantageous
to the growth of its business model.
Longwei has received strong interest from institutional and
private investors in visiting its facilities, including the new
Huajie facility. The Company plans to host an investor and
analyst day to invite shareholders and interested parties to tour
its facilities. Once plans are finalized, the Company will
release additional details.
Longwei recently reported revenues of US $510.6 million and net income of US $65.1 million for the fiscal year ended
June 30, 2012. At the
June 30, 2012 fiscal year-end, the
Company reported total assets of US $342.3
million and a book value per share of $3.31.
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy
company engaged in the storage and distribution of finished
petroleum products in the People's
Republic of China. The Company's oil and gas operations
consist of transporting, storing and selling finished petroleum
products, entirely in the PRC. The Company's headquarters are
located in Taiyuan City, Shanxi
Province. The Company has a storage capacity for its
products of 220,000 metric tons located at three storage facilities
within Shanxi: Taiyuan, Gujiao and
Huajie, which have an individual storage capacity of approximately
50,000 metric tons ("mt"), 70,000mt, and 100,000mt,
respectively. The Company has the necessary licenses to
operate and sell petroleum products not only in Shanxi, but throughout the entire PRC. The
Company's storage tanks have the largest storage capacity of any
non-government operated entity in Shanxi.
The Company seeks to earn profits by selling its products at
competitive prices with timely delivery to transportation
companies, coal mining operations, power supply customers,
large-scale gas stations and small, independent gas stations. The
Company also earns revenue from agency fees by acting as a
purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel
and gasoline at two retail gas stations, each located at the
Company's Taiyuan and Gujiao facilities. The Company seeks to
continue to expand its customer base and distribution platform
through the utilization of its large storage capacity, which allows
the Company the flexibility to take advantage of pricing, supply
and demand fluctuations in the marketplace.
Longwei was recently named to the Forbes list of
"Asia's 200 Best Under a Billion"
from a universe of 15,000 companies. Forbes ranked the
companies based on sales growth, earnings growth and return on
equity in the past 12 months and over three years. As was
reported, Longwei's three-year track record is 45% sales growth,
28% earnings per share growth and 28% return on equity. The
Forbes article can be found at:
http://www.forbes.com/sites/christinasettimi/2012/07/25/asias-200-best-under-a-billion.
For further information on Longwei Petroleum Investment Holding
Limited, please visit http://www.longweipetroleum.com. You may
register to receive Longwei Petroleum Investment Holding Limited's
future press releases or request to be added to the Company's
distribution list by contacting Dave
Gentry at info@redchip.com.
Forward-Looking Statements
Certain statements contained herein constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations, estimates and
projections about Longwei's industry, management's beliefs and
certain assumptions made by management. Readers are cautioned that
any such forward-looking statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Because such statements
involve risks and uncertainties, the actual results and performance
of the Company may differ materially from the results expressed or
implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Longwei's operations are conducted
in the PRC and, accordingly, are subject to special considerations
and significant risks not typically associated with companies in
North America and Western Europe. These include risks associated
with, among others, the political, economic and legal environment
and foreign currency exchange. The Company's results may be
adversely affected by changes in the political and social
conditions in the PRC and by changes in governmental policies with
respect to laws and regulations, anti-inflationary measures,
currency conversion, remittances abroad, and rates and methods of
taxation. Other potential risks and uncertainties include but are
not limited to the ability to procure, properly price, retain and
successfully complete projects, and changes in products and
competition. Unless otherwise required by law, the Company also
disclaims any obligation to update its view of any such risks or
uncertainties or to announce publicly the result of any revisions
to the forward-looking statements made here. Readers should review
carefully reports or documents the Company files periodically with
the Securities and Exchange Commission.
Contact:
At the Company:
Michael Toups, Chief Financial Officer
Tel: U.S. Office +1-727-641-1357
Email: mtoups@longweipetroleum.com
Web: http://www.longweipetroleum.com
Investor Relations:
Mike Bowdoin
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 110
Email: mike@redchip.com
Web: http://www.redchip.com
SOURCE Longwei Petroleum Investment Holding Ltd.