SOURCE: Guanwei Recycling Corp.

December 28, 2009 08:00 ET

Guanwei Recycling Corp. (Formerly MD Holdings Corp) Begins Trading Today With New Stock Symbol: GURC

A Fast Growing Environmental Leader, Guanwei Is China's Largest Producer of Recyclable Low Density Polyethylene (LDPE)

FUQING CITY, CHINA--(Marketwire - December 28, 2009) - Guanwei Recycling Corp. (OTCBB: MDHO), following a name change from MD Holdings Corp, announced that its shares will begin trading today on the OTC Bulletin Board with a new stock symbol: GURC.

Guanwei Recycling is China's largest manufacturer of recyclable Low Density Polyethylene (LDPE). It has generated rapid growth producing LDPE from plastic waste procured in Europe which it recycles into recyclable LDPE for sales to more than 200 manufacturers in more than ten industries in China.

In a press release last week on the Company's name change, Mr. Chen Min, Chairman and CEO of Guanwei, explained, "By meeting the highest European environmental standards, Guanwei is one of the few plastics manufacturers licensed in China that also has obtained the certificate issued by the German Environment Auditing Association. Our advantage is that we procure high quality plastic waste directly from Germany and other European countries, with no middlemen, which enhances our bottom line and permits economic production of the highest grades of LDPE."

Mr. Chen noted further, "As previously reported, in 2008 sales increased 61% to $25.4 million, with more demand for our high quality product than we could supply. The financial crisis in the first half of 2009 temporarily lowered demand and prices, but we still achieved a 74% gain in operating income on a sales increase of 149% to $30.4 million."

According to the Company, driving this growth is the fact that China consumed more than 50 million tons of plastic in 2008, which exceeded plastics production capacity of 20 million tons. Additionally, 24% of plastic consumed within the country was produced by recycled plastic. It further noted that the demand for plastic products in a strengthening economy continues to accelerate spurred in part by the government. Among the key industries served by the LDPE produced by Guanwei is the building and construction industry, where there has been an ongoing governmental push to promote the use of plastic in a variety of products, such as water and sewage pipelines.

2009 Nine Month Sales Up 102.85%

As reported last week, the Company said that in its third quarter ended September 30, 2009, net income grew 175.39% to $2,139,783 from $776,999 in the same period last year, on a revenue increase of 14.02%, to $7,446,817 in the third quarter of 2009 from $6,531,375 in the third quarter of 2008.

Through the first nine months of 2009, revenues reached $37,892,598, up 102.85% compared with revenues of $18,679,751 in the first nine months of 2008. In the 2009 period the Company realized an 89.94% increase in net income to $5,872,045 compared with $3,091,465 in the first nine months of 2008.

As also reported, reflecting the recovery in the selling price of LDPE in the third quarter of 2009, through the first nine months of the year the average selling price of LDPE was $996 per ton, a 10.71% decrease from the same period last year. In the third quarter, however, the average selling price of recycled LDPE was $1,045, about matching the $1,049 per ton in last year's third quarter. This was one factor in the 139.87% increase in gross profit in the quarter, and the increased profit margin in the period which grew to 41.85% from 19.89% in the same period last year. Additionally, the Company purchased lower volumes of scrapped plastic at prices significantly lower than in the same period last year, in part reflecting lower oil prices. In the 2009 third quarter, the Company also saw an approximately 20.39% increase in sales volume, selling 6,976 tons of recycled LPDE compared with 5,794 tons in the same period in 2008.

"Going forward, as noted in our results announcement, we clearly are operating in a much improved economy and are optimistic about continuing growth," Mr. Chen said. He added, "At the same time, we will continue to contribute to a cleaner environment in China and elsewhere in the world."

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.

Contact Information

  • Contacts:

    US Investors

    Focus Asia Partners
    Robert Agriogianis
    Tel: 973-845-6642
    Fax: 973-845-6649

    Press

    Ken Donenfeld
    donfgroup@aol.com
    Tel: 212-425-5700
    Fax: 646-381-9727