Grand Power Logistics Group Inc.

Grand Power Logistics Group Inc.

April 30, 2008 07:30 ET

Grand Power Reports Strong Growth in 2007

- Expansion into new markets drives 68% revenue increase - Gross profit increases by 72%

CALGARY, ALBERTA and HONG KONG, CHINA--(Marketwire - April 30, 2008) - Grand Power Logistics Group Inc. ("Grand Power" or the "Company")(TSX VENTURE:GPW) is pleased to announce its consolidated financial results for the year ended December 31, 2007. These results include the operating results of Grand Power's wholly-owned subsidiary, Grand Power Express International Limited of Hong Kong (GP Express).

Grand Power reported strong revenue growth for the Fiscal Year ending 31 December 2007. Revenue increased by 68.4% to $99.6 million compared to $59.2 million during the same period in 2006. Gross Profit for the year increased by 72% to $6.9 million compared to $4.1 million for 2006. Costs related to the Company's aggressive expansion, particularly in China, as well as non-cash expense of $620,200 for employee stock based compensation resulted in a net loss of $139,623 compared to a profit of $668,437 in the previous year. Basic and diluted loss per share for 2007 was $0.01.

"We are pleased with our accomplishments during 2007. We've added more locations, strengthened our sales and management teams, invested in new technology to support our operations, and we can see the results with the strong growth coming from those initiatives. Successfully implementing our expansion plans did challenge our margins during the year, but we believe our efforts will be rewarded with continued strong revenue growth and increased profits as we benefit from economies of scale and our entry in higher margin segments of the logistics value chain," said Ricky Chiu, President and CEO of Grand Power, "We see tremendous opportunities for business growth, not only within the Asia-Pacific Region, but also in our trans-Pacific and global business. We have built a solid operating platform in the airfreight wholesale co-loading business and will now focus on expanding our operations into market segments with higher operating margins, such as direct clients, warehousing, and sea, rail and truck transport."

Approximately $31 million of the Company's reported revenue came from some of GP Express' Subsidiaries and Branch Offices in China and Hong Kong. The Company's subsidiary in Shenzhen, which first opened for business in April 2007, contributed $11.6 million in its first 9 months of operation; The Shanghai subsidiary which includes the operating results of Guangzhou and Jiangmen, contributed $7.4 million. GP Express' Hong Kong subsidiaries of Redcap Logistics and BSI Logistics, contributed $11.8 million, while the Los Angeles, California office which opened in April 2007, contributed $2.6 million.

The Company also experienced strong growth in cargo volume during 2007, with shipments increasing by 36.3% to 42,105 tonnes, compared to 30,888 tonnes during the same period last year.

Cargo shipments showed the strongest growth in the European markets, growing by 162% to 7,973 tonnes in 2007 compared to 3,043 tonnes in the previous year. Strong gains were also reported in the US markets with 9,468 tonnes shipped, an increase of 43.9% over 6,579 tonnes shipped in 2006. Growth in the Inter-Asia markets also remained strong, increasing by 16% to 24,663 tonnes in 2007 compared to 21,265 tonnes in the previous year.

Grand Power's expansion into China in 2007 also resulted in significant growth as air cargo increased by 926% to 4,388 tonnes from only 427 tonnes in the previous year, demonstrating the Company's ability to quickly develop a customer base in that region.

Operations Update

Grand Power continues to execute its growth strategy of increasing revenues in higher margin areas of the market. The Shanghai and Guangzhou expansion are progressing ahead of schedule with an aggressive recruiting program of senior sales and support staff with existing customer bases and many years experience in the logistics business. Grand Power's Shanghai subsidiary has established a bonded warehouse space inside the Shanghai Pudong Airport allowing Grand Power to manage for their clients the entire cargo process from assembly of cargo, storage, and custom brokerage to final loading. The Company also believes it can penetrate other complimentary segments of the market with potential joint ventures or selected acquisitions in China's highly fragmented logistics industry, which the Company believes is in the early stages of a period of rapid consolidation. To help facilitate further expansion and grow market share, Grand Power has established Shanghai as the China headquarters.


Grand Power has successfully undertaken a number of initiatives designed to increase its market share and geographic reach, as well deliver top and bottom line growth. In 2008, the Grand Power expects that these actions will allow the Company to achieve the following milestones:

- Expanding core airfreight business with a target of at least 60% revenue growth for 2008.

- Improving profitability of core airfreight business: improve gross margins by increasing revenue per tonne through direct sales and decreasing cost per tonne by purchasing bulk space on selected airlines; and, increase net margins through economies of scale, as G&A is expected to decrease as a percentage of revenues.

- Expanding its China logistics network by establishing offices in additional cities, including Tianjin, Xiamen and Beijing.

- Expanding its warehousing business in Shanghai and other key Chinese cities with major airports to grow warehousing revenues and facilitate expansion into customs brokerage and warehousing for imports into China.

- Establishing entry into logistics segments such as rail, sea and truck transport in China through selected acquisitions, joint ventures and recruiting of experienced executives.

Grand Power believes it can continue to deliver year over year growth consistent with its historical average. While China has reported some slowing in its economic expansion, growth remains strong in the logistics industry within China and intra-Asia where Grand Power derives the majority of its revenue. Expansion into additional cities will be a key driver of the Company's plans to establish a national network within China. The Company has grown to a critical size, increasing its ability to be competitive in the direct sales market in its core airfreight business, positioning it to attract key talent to support its growth into new cities and higher margin logistics sectors.

About Grand Power Logistics Group Inc.

Grand Power Logistics Group Inc. operates principally through its wholly owned Hong Kong based subsidiary, Grand Power Express International Limited (GP Express), and provides air-freight forwarding and sea-freight services, customs brokerage, logistics, warehousing and distribution, as well as other value added services. GP Express has established operations in various regions, particularly in the Greater Pearl River Delta (GPRD), China's largest economic region. GP Express' Subsidiaries or Branch Offices in this region are located in Macau, Shenzhen, Guangzhou, and Jiangmen. GP Express also operates in other regions through Subsidiaries and Branch Offices or Supporting Offices in Shanghai, Taipei, Bangkok and Los Angeles.

Forward-looking statements: Statements included in this press release that are not historical facts may be considered "forward looking statements". All estimates and statements that describe the Company's objectives, goals or future plans are forward looking statements. Forward-looking statements involve inherent risks and uncertainties where actual results could differ materially from those currently anticipated.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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