SOURCE: Guanwei Recycling Corp.

May 16, 2011 08:00 ET

Guanwei Recycling Corp. 2011 First Quarter Sales Grew 49% Year Over Year Generating 23% Increase in Net Income

Investor Conference Call to Be Held Tuesday, May 17, at 8:00am ET

FUQING CITY, CHINA--(Marketwire - May 16, 2011) - Guanwei Recycling Corp. (NASDAQ: GPRC), China's leading clean tech manufacturer of recycled low density polyethylene (LDPE), today reported that continuing strong demand in China for recycled plastic propelled sales in its 2011 first quarter to record levels.

For the first quarter ended March 31, 2011:

--  Revenues increased 49% to $14,142,612 compared with $9,494,226 in the
    same period last year.
--  Gross profits increased 28% and contributed to a 23% increase in net
    income of $2,715,282 or $0.14 per share compared with $2,204,604 or
    $0.11 per share in the first quarter of 2010.
--  Cash and cash equivalents were $13.95 million compared with
    $10.28 million in the year ago quarter.

The Company added that sales of its core self manufactured product on a tonnage basis increased 38% to a record 12,233 tons, compared with 8,870 tons in the prior year period. Additionally, the selling price per ton realized by the Company during the quarter increased 8.37% to $1,139, compared with $1,051 in last year's first quarter. The increase in selling price, however, lagged behind increases during the quarter in raw material (plastic waste) costs, which were the key contributor to increases in manufacturing costs of approximately 20% year over year. Although lower than the 35% gross margin in the first quarter last year, the Company achieved a gross margin of 30% in this year's first quarter, in line with historical results.

Continuing Favorable Outlook

Mr. Chen Min, Chairman and CEO of the Company stated, "We were quite pleased with the sales growth in the quarter and see continuing strength in sales through the remainder of the year from our diversified customer base. We also envision continuing bottom line growth as we maintain our focus on expanding and strengthening our relationships with suppliers and making timely adjustments in our pricing. As always, our particular focus is on maintaining compliance with the highest environmental standards, which provides us with a clear advantage over competitors."

Increasing Import Quota and Production Capacity

Mr. Chen added that the Company continues to move forward toward achieving an anticipated tripling of its current aggregate annual quota for imported plastic waste from 59,000 tons currently to an aggregate of 185,000 tons. The Company believes its application will be approved by July prorated for the remainder of the year.

He also reported that to accommodate anticipated future growth the Company is continuing to develop plans to expand production capacity which currently is 65,000 tons annually. He added, "We will proceed in a measured fashion that makes the most sense in the current financial environment."

Conference Call Invitation

The Company will discuss first quarter results during a live conference call and webcast on Tuesday, May 17, 2011, at 8:00am ET.

To participate in the call, interested participants should call 1-888-846-5003when calling within the United States or1-480-629-9856 when calling internationally. Please ask for the Guanwei Recycling Corp. 2011 First Quarter Earnings Conference Call, Conference ID: 4440245. There will be a playback available until 05/24/11. To listen to the playback, please call 1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4440245.

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link or at ViaVid's website at


Description of Guanwei Recycling Corp.

Guanwei Recycling Corp. is China's largest manufacturer of recycled low density polyethylene (LDPE). Adhering to the highest "green" standards, it has generated rapid growth producing LDPE from plastic waste procured mostly in Europe for sales to more than 300 customers in ten different industries in China. Guanwei Recycling Corp. is one of the few plastic recyclers in China that has been audited by German authorities, most recently Umweltagentur Erftstadt, for compliance with German pollution and environmental standards. This allows the company to procure high quality plastic waste directly from Germany and other European countries (Spain and Holland), with no middlemen, and permits highly economic production of the highest grades of LDPE. Additional information regarding Guanwei Recycling Corp. is available at

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.

                          GUANWEI RECYCLING CORP.
                        (Expressed in U.S. dollars)

                                                    Three Months Ended
                                                         March 31,
                                                    2011          2010
                                                ------------  ------------
Net revenue                                     $ 14,142,612  $  9,494,226

Cost of revenue                                    9,907,512     6,173,352
                                                ------------  ------------
Gross profit                                       4,235,100     3,320,874
                                                ------------  ------------

Operating expenses
Selling and marketing expenses                        88,791        48,499
General and administrative expenses                  543,770       322,956
                                                ------------  ------------
                                                     632,561       371,455
                                                ------------  ------------

Income from operations                             3,602,539     2,949,419

Interest income                                       22,970         8,252
Interest expenses                                    (17,435)      (20,160)
Exchange gain, net                                    71,296             -
                                                ------------  ------------
Income before income taxes                         3,679,370     2,937,511

Income taxes                                         964,088       732,907
                                                ------------  ------------

Net income                                      $  2,715,282  $  2,204,604
                                                ============  ============

Comprehensive Income:

Net income                                      $  2,715,282  $  2,204,604

Other comprehensive income
   - Foreign currency translation adjustments        217,182         2,833
                                                ------------  ------------

Comprehensive income                            $  2,932,464  $  2,207,437
                                                ============  ============

Earnings per share attributable to shareholders
 of Guanwei Recycling Corp.
   -  basic and diluted                         $       0.14  $       0.11
                                                ============  ============

Weighted average number of share of common
 stock used in computing basic and diluted
 earnings per share                               20,000,006    20,000,006
                                                ============  ============

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